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A Keynesian Monetary Politburo Member Speaks

May 15, 2013 in Economics

By Thomas DiLorenzo

The president of the Minneapolis Fed, one Narayana Kocherlakota, decided to devote the entire 2012 Annual Report to not one but two interviews with . . . . . . . . himself.   The interviews are a celebration of economic stupidity.  A few excerpts:

“Quantitative easing has the impact of pushing down on longer-tern interest rates.  And that should be directly stimulative to the economy because by pushing down on market interest rates, people are led to think, ‘Hmm, maybe I shouldn’t be buying those assets that are paying such a low yield.  I should spend money instead.’”    No need to save, invest, or work and produce; just spend, spend, spend, like a nation of spoiled rich kids.

“We’d like to push it [interest rates] down further and can’t.  That should be a signal to the fiscal authority to be more interventionist in the economy” with a “future consumption tax” to “encourage current spending.”

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