Congressman Tom Reed is criticizing the recent decision by the Federal Reserve to undertake a third round of quantitative easing which is stimulus policy by any other name. The Fed's open-ended plan is to spend $40 billion per month to purchase bonds, which equates to $480 billion over the next year alone. This is a direct strategy to weaken the US dollar that will be a major reason why oil, energy and food costs will soar in the upcoming months.
"Unlike those who say they are all about the middle class, I am concerned about the middle class," Reed said. "The President's and the Federal Reserve's stimulus policies will cause hardworking taxpayers to pay more at the pump and grocery store and for their monthly energy bills. It must stop. These policies will also increase costs for our small businesses, entrepreneurs and job creators at a time when we should be supporting policies that reduce their costs."
"To create jobs, we need to make the American marketplace more competitive and this DC policy does not do that," Reed continued. "Rather than a weaker dollar, our priorities must be removing onerous regulation, streamlining the tax code and lowering energy costs by utilizing domestic energy sources."
"We need to stop this mentality that we can borrow and spend our way out of the recession," Reed said. "Just like the President's attempts to spend our way back to prosperity, the Federal Reserve is tripling down and repeating an unsuccessful policy."
Reed is also concerned that by creating such a huge risk of inflation without addressing the national debt, the Federal Reserve will ultimately raise interest rates which in turn will balloon the payments necessary on the debt. Debt payments are paid today at historically low rates. If those interest rates increase, payments due on the debt could increase from $200 billion to $800 to $900 billion. To put that into perspective, the U.S. spends $700 billion on national defense annually. "To have to apply that to our future debt payment, puts our nation in serious peril," Reed said.
"This is desperate and dangerous," Reed declared. "We have to stop the short-term gimmicks seven weeks before an election and focus on long-term solutions."