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Former CBO director Douglas Holtz-Eakin explains what a new Fed Chairman could do differently.
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Peter Barnes and Washington's okay then thanks and with us right now Douglas Holtz Aiken former Congressional Budget Office director also worked -- Lot of in the White House he joins us now from Washington DC.
They ask you this that is good to see about a -- until this year Federal Reserve -- get a -- she gave.
Would -- really be on the same and Olivia de bit maybe it would be a woman.
I'm -- really be any different then and do anything differently than what Ben Bernanke has done.
Well I.
Think the big calls have been -- QE2.
The -- promise of up perhaps further quantitative easing.
Those are judgment calls to our I think the profession has been divided.
-- questions.
Mr.
Bernanke's expertise sort his motives.
Many people disagree with the policies -- actually been done so.
You could expect under -- new Federal Reserve Chairman to actually see those calls go another direction.
And see less of them very aggressive fed action that we've seen in recent years.
-- -- But 'cause the Federal Reserve it whether you will be admitted or not is highly politicized.
In a way that.
Will cause if unemployment is north of 8% if we're in the middle of a financial crisis the Fed even if not told directly is expected to do some bank.
So -- -- would any in the past would anybody really have been left with any intent to do anything differently.
Then what we saw -- -- sand.
Yeah I mean that they have been under tremendous pressure and -- -- they're under pressure because.
The administration and the congress have really dropped the ball and providing effective fiscal policy and as you know we face this fiscal cliff at the end of the year which is.
A big threat to economic growth of the moment so.
In those circumstances.
I think any opera specialists say -- we got to do something something is better than nothing but.
-- if you could there variety of policies that they -- taken on terms of paying interest rate on reserves vs quantitative easing and they'll proceed to.
It wouldn't congress change its ways if we had -- the -- reserve and by the way the unexpected outcome of next year.
But could the Fed force congress to get its act together hey we're not gonna keep interest rates.
As low as we possibly can we're gonna you know in interests of the hand of long don't get on the stick and cut our debt.
Well I certainly think that if you haven't have during the confirmation process.
The opportunity and off and -- should point.
That they case that there -- we do that in conductor the Fed is not going to step in and rescue me.
I obvious and it hopefully it will spur some action cannot continue.
Down the path we're currently headed both in the short term with the fiscal cliff recession.
Or in the wide is that -- it's like we're shout into the -- event.
Now we put it -- -- we say the same things.
