Why do federal reserve chairman worry about the deficit?
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  Why do federal reserve chairman worry about the deficit?
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Author Topic: Why do federal reserve chairman worry about the deficit?  (Read 319 times)
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HoffmanJohn
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« on: May 15, 2010, 03:22:18 PM »
« edited: May 15, 2010, 03:27:38 PM by HoffmanJohn »

I have read up on the lives of 4 federal reserve chairman, and honestly i have always been puzzled as to why Both Alan Green Span, and bernanke continue to advocate for less government spending. I am puzzled because both of them had some misgivings about the stimulus, and they are deficit hawks even when government should be increasing the deficit and cutting tax's. Thus I wonder if a lower deficit, or balanced budget effects the profit making ability of the federal reserve? Its just a guess though because I know that the Federal Reserve will sometimes make a surplus, and transfer this money to the treasury.

Green Span would consistently say that he would have been supportive of the bush tax cuts if it had a trigger, and the media inaccurately reported this to mean that he actually supported the bush tax cut. Secondly he is a strong believer in the idea that less government debt will reduce the cost of borrowing.
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Derek
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« Reply #1 on: May 15, 2010, 03:36:04 PM »

With alot of deficit though, you have to remember that it's the federal reserve that compensates for that. When there are massive deficits combined with a recession, that's where the real problem lies with the federal reserve. The debt in the US is too big a problem for someone not to care about. I actually am starting to think it's the biggest problem we face. At least domestically.
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