Recently, Rick Perry made a statement accusing the Federal Reserve of treason if the chairman Ben Bernanke “prints” more money before the next election. In Perry’s own words, “If this guy prints more money between now and the election, I dunno what y’all would do to him in Iowa, but we would treat him pretty ugly down in Texas. Printing more money to play politics at this particular time in American history is almost treasonous in my opinion.”
Well, Perry has come under tremendous scrutiny, since he is one of the leading contenders for the Republican nomination. The obvious criticism is not his use of the word “dunno,” and the unpleasant George Bush flashbacks that word conjures up, but the accusation of treason and his apparent lack of knowledge on how economics really works.
So, Ben Stein, another conservative Republican who is known for his economic commentary, felt the need to explain a few things to Rick Perry. Ben wrote;
This economy is stuck in a cruelly slow recovery from a recession that started on Bush 43’s watch. Mr. Obama, a likeable man, is trying to get the economy going again. Mr. Bernanke, who has made many mistakes at the Fed, is also trying desperate measures to get the economy moving again.
One of the measures the Fed is using is to increase the money supply or what Gov. Perry would call “printing money.”
Typically this is a helpful move, although not lately. It’s not a radical move. It’s not anywhere near a “treasonous” move.
It is not at all clear that in an economy as weak as ours that creating more money would cause inflation.
The idea is to make money cheaper so businesses will borrow and then invest.
That’s simple enough. Make money cheaper, that way business will borrow more to invest, which leads to more hiring, and more purchases made by workers collecting a paycheck, thus, the economy gets moving again.
Or maybe Rick Perry already knew that having the Feds print more money could be beneficial to the economy, and his intention is not to get the economy moving again before the next election, in which case, quite frankly, would be treasonous move on his part.
