This is the last article in a short series on America's loss of prosperity and the things that Obama and the liberal progressives are doing that are ultimately bringing this loss of prosperity to pass. Quantitative easing, the Fed's euphemism for simply creating additional money out of thin air, is playing a substantial role in this. It's important to understand what quantitative easing ultimately does.... it buys you time.
Quantitative easing doesn't necessarily have to be a bad thing. If you are facing an economic crisis and by using quantitative easing you can postpone that crisis and subsequently avoid it by fixing the fundamental elements that are the cause of that crisis, then quantitative easing is actually a good thing. Unfortunately that is not what is happening in America right now.
As I mentioned in my last article "destroying the foundation of America’s prosperity," the fundamental underlying cause of the economic crisis and the loss of prosperity to come is liberal progressive ideology and the welfare nanny state that it has created. What liberal progressive ideology has done is take half the population and punish/disincentivized it from working and pursuing success through extreme inequality in income taxes with an aggressive "progressive" tax stratification. It has taken the other half of the population and bathed it in rewards to not work at all and to not even take the first step towards realizing their potential. With the economy being people working (doing and creating things of value) the combined effects of these policies is that liberal progressive ideology is destroying the economy from both directions.
With this being the fundamental cause of the economic crisis to come, the answer is simply to use the time given by quantitative easing to fix that fundamental cause...to replace the inequality in income taxes with a flat tax that removes all tax breaks and favoritism; and, to replace the disastrous system of social welfare entitlements (that ultimately destroys the very people it's intended to help) with an actual bare bones safety net. If we were utilizing the time given to us by quantitative easing to implement these critical reforms then quantitative easing would actually be a good thing.
Instead, with Obama and the liberal progressives in power, they are seeking to expand these extremely foolish policies. In the current environment, quantitative easing is simply an enabler of this foolishness. By now we should be feeling significant amounts of negative feedback on the economy because of these liberal progressive policies but we are not because it is being papered over with billions of dollars per day of quantitative easing and additional federal government borrowing. We will still feel these negative economic effects but, instead of experiencing it gradually, it is being stored up for the future where it will be unleashed with much more devastating cumulative effect.
Ben Bernanke should be smart enough to know that, with Barrack Obama and the liberal progressives in charge of the federal government, the additional time gained from his quantitative easing is going to be wasted on perpetuating this foolishness instead of fixing it. It would be better for us as a nation to be feeling the economic pain and negative feedback that comes from undermining the economy (and from flat out ignoring common sense) rather than concealing it with quantitative easing, which only leads to far worse economic pain in the future. At least by experiencing some of the economic pain today it might wake up the majority of the American populous to the fact that liberal progressive ideology and the welfare nanny state does not work. Mr. Bernanke, your legacy will not be defined by the relative calm of today. It will be defined by the strife and economic devastation that is to come and by the fact that you will have played a significant contributory role in creating it.