What Comes After a Trillion?

Maybe it was my imagination, but Ben Bernanke looked a little pale on 60 minutes.  Nervous, too.  I would be nervous if I were given the impossible task of fixing the economy.  Pulling out all the Keynesian stops has resulted in little but ridicule and criticism.  Rightly so.  Ben can’t fix what has been broken for close to 100 years–the Fed itself.  It should not exist and nothing is going to get much better until it is gone.

$600 billion of “quantitative easing?”  Now, $600 billion is getting awfully close to $1 trillion.  A trillion is awfully close to numbers big enough to describe the number of Waffle Houses in Georgia.  The Fed has made it clear that it is willing to buy more government bonds if necessary.  How many?  Hell if I know, but when they bump up against a quadrillion, I may have to take off my shoes to cipher.

No matter what the conjurers do, it won’t help unless businesses, the actually creators of prosperity, get on board and trust that they can invest in new opportunities without fear of a sharp left turn.  Think they will do that with Democrats in an apoplectic rage over Obama’s recent quasi-sensible capitulation on taxes?  Or with Old Guard Republicans vowing to tame the Tea Party newcomers?  Yeah, I doubt it too.

Here’s a better idea.  Admit that we are hosed when it comes to managing our economy through the Fed.  Pass Ron Paul’s bill allowing people to contract with one another in any currency they wish.  By repealing legal tender laws, the dollar will have competition.  When the dollar has competition, it will soon be exposed for what it is–a worthless fiction.  Then we can get back to business–real business, the kind you do with real money.

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About Terry Noel

I am an Associate Professor of Management and Quantitative Methods at Illinois State University. My specialty is entrepreneurship.
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