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    Government Promises: Not Worth the Paper They're Printed On

    08/11/2009

    Back in June, the Washington Times reported on what seemed then to be a straightforward exchange between Rep. Paul Ryan (R-WI) and Federal Reserve Chairman Ben Bernanke:

    "The Treasury is issuing debt and the central bank is buying it," Mr. Ryan said. "It gives the alarming impression that the U.S. one day might begin to meet its financial obligations by simply printing money."

    But Mr. Bernanke adamantly denied that would happen. "The Federal Reserve will not monetize the debt," he said.

    Maybe Mr. Bernanke misspoke. Perhaps he thought monetizing the debt meant actually paying it off. Which, as Treasury Secretary Timothy Geithner demonstrated last week, the federal government obviously has no intention of doing.

    Because if he realized that he was promising, under oath, not to print money and devalue the dollar, how could Mr. Bernanke, barely two months later, do exactly what he said he was not going to do?

    This is hardly the first time the credibility of the Fed and the motives of its chief have been called into serious question.

    But in the context of current policy debates over dramatically expanding government control, now might be a good time to ask: At what point will Americans stop giving the benefit of the doubt (along with enormous wealth and power) to politicians who have consistently proven they cannot be trusted?

    Never mind, forget I asked. Just go back to sleep and wait for the amazing free health care that Nancy Pelosi swears no one will ever have to pay for.