Federal Reserve Role Makes Sequester Look Trivial

Sequestration kicks in later today, triggering automatic federal government spending cuts amounting to $85 billion over one fiscal year. It is quite the political and economic “crisis” that could only be invented in Washington.

Also invented in Washington is our central bank, the Federal Reserve Board (the Fed). That federal agency is printing new money (by buying bonds) at a pace of $85 billion per month. The Fed’s commitment to keep those purchases going is open-ended, and its balance sheet is already north of $3 trillion as a result of past bond purchases.

You can draw any conclusions you want from all this, but when we Americans decided to turn our economy over to the federal government we may have gotten more than we bargained for.