Bernanke: Presidents Should Be Able To Declare Economic Emergencies (As Yellen Pleads “Don’t Audit Me, Bro!”)

Former Federal Reserve Chair Ben Bernanke recently suggested that The President should be able to declare ECONOMIC emergencies. What does that mean? Martial law? Prison camps? Probably not. But unlimited borrowing and spending by the Federal government to implement a recovery (and bypassing Congress) is the likely answer.

it might make sense to give “the president some ability to declare emergencies or take extraordinary actions and not put that all on the Fed,” Bernanke said at a conference. “The constitution gives the president significant flexibility to respond to military situations,” in part because they are chaotic, he noted.

This is a Keynesian’s dream! Imagine all the broken windows that will occur to justify the manufacturing and installation of new windows.

Yes and if The President can declare economic emergencies, then The President can spend unconstrained by Congress. No moral hazard problems here!!! [Cough, cough]

If this wasn’t bad enough, we have the current Federal Reserve Chair, Janet “The Shadow” Yellen screaming “Don’t audit me, Bro!” As in, DON’T audit The Fed.

Her argument? An audit would be overly political.

After I stopped laughing, I decided to lay out a few points.

First, The President nominates the Chair of The Federal Reserve Board and the US Senate confirms the nominee. The seven members of the Board of Governors are appointed by the President and confirmed by the Senate to serve 14-year terms of office. If this isn’t already political, I don’t know what is!

Second, losses on The Fed’s asset purchases are sent to the US Treasury for payment. As a taxpayer, I think I should be able to know what I am liable for in taxes. And since The Fed is the largest holder of US Treasury debt, I think knowing what is happening behind the curtain would be helpful.

fedholdingsThe standard comeback is “The Fed is already audited by others” and “The President would NEVER do that!” These comebacks are unconvincing.

Particularly after reading “Obama “Very Interested” In Raising Taxes Through Executive Action.”