Governor Rick Perry is renewing his calls for Federal Reserve Chairman Ben Bernanke to resign, in the wake of the Federal Reserve's new emergency stimulus program. Perry called the Fed's 'quantitative easing' plan to buy $40 billion dollars a month in assets "shocking, even by Washington standards." The plan, announced today, would entail buying mortgage-backed securities in an effort to make home buying more affordable.
In a statement today, Chairman Ben Bernanke said "The new MBS purchases—combined with the existing maturity extension program and the continued reinvestment of principal payments from agency debt and agency MBS already on our balance sheet—will result in an increase in our holdings of longer term securities of about $85 billion each month for the remainder of the year."
Gov. Perry, who has called Bernanke 'treasonous' in the past, fired back at the announcement. His office issued a statement, saying:
"Not only is QE3 no solution to our economic woes, it represents a huge step backward. While it might provide a temporary boost – or at least maintain the sluggish status quo – before the November elections, it will add untold billions of dollars to the Fed’s balance sheet to give the illusion of an improving economy. Yet the Chairman knows full well that the economy continues to be dragged down by incompetent leadership in Washington that has us stuck, in his own words, on an “unsustainable fiscal path.”
In essence, this is the mother of all bailouts – with Mr. Bernanke throwing trillions of dollars at the economy to cover up Washington’s fiscal failures. But this bailout has potentially devastating long-term consequences in the form of a weaker dollar and the increased likelihood of inflation. And, not coincidentally, we have seen rising commodity prices in recent years even as real incomes are declining – making life in the middle class all the more difficult.
Last year, I suggested that Mr. Bernanke should resign. Now, I believe even more strongly that he should go, and take his failed policies with him.”