A Clue For Paul Volcker

CBS News:

Paul Volcker, a top economic adviser to President Barack Obama, said Tuesday he sees no short-term way to reduce high U.S. unemployment and expects slow growth for the next year or more.

Volcker's comments come after the U.S. Federal Reserve said last week it would purchase $600 billion in Treasurys in an effort to boost growth and create jobs, cutting unemployment that stands at 9.6 percent.

"I have no answer to it at the moment, and I think that is the basic problem," said Volcker when asked about unemployment at a financial forum.

"I suspect that it will gradually decline. But the basic fact of the matter is that the economic outlook is for continuing but limited increases in economic activity for the next year or more," he said.

Volcker is chairman of Obama's Economic Recovery Advisory Board and was Fed chief from 1979 until 1987 under presidents Jimmy Carter and Ronald Reagan. He was speaking at a meeting of the International Financial Forum, a group of bankers and finance officials from the United States, China and other countries.

Have they gone completely insane? On the premise that sufficiently-advanced cluelessness is indistinguishable from malice, I offer the following to Volcker and Obama:

Stop Spending All The Money

I mean geez, a trillion here, a trillion there, and pretty soon you're not dealing with anything that can be called money anymore. Is anyone foolish enough to buy Zimbabwe's currency? No, because it isn't real money, it's worthless.

That's what happens when you print money as fast as the presses can go, with nothing to back it, not even future promises - which is exactly what printing $600 billion to buy Treasury Bonds is doing. That's the way to hyperinflation. And when it happens to the United States, the consequences would be misery and death without historical parallel.

Britain is starting to figure it out. Pray that the new Congress forces fiscal sanity.

one first, small step

The election results are in. Across the US Republicans are celebrating. However, this is only the first, smallest step on the road to restoring fiscal sanity in the US and the West in general. It is going to take a sustained effort, over every piece of legislation and over many election cycles to undo the damage cause by so-called "progressives" over the last century.

The new Congress can start right away in January by undoing vast swaths of the damage caused by Obama and Reid and Pelosi. The Health Care reform is an obvious starting point. Something so blatantly unconstitutional simply cannot stand.

Then the real digging begins. Using the US Constitution as their guide the new Congress should look at other previous legislation and strike down other unconstitutional laws. There is a lot of low-hanging fruit there.

It might take a generation.