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Former Sen. Phil Gramm, (R-Texas), argues Federal Reserve actions are not helping boost the economy.
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Some concerns.
We're gonna get a fair and balanced debate on this with first of -- former.
Senator Phil Gramm of course -- -- the former senate banking committee chair and senator I I guess that's what troubles me.
And not so much that I love run -- as much as the next guy.
Don't -- what's what's prompted us what's that you.
Well forcible.
You've got to remember that every thing the Fed is doing now.
It's going to have to reversed when the economy ultimately -- -- growth that's right.
So for example it will low ball -- this new action a trillion and a half a government debt.
It will monetize that debt.
When it sells that trade and -- half dollars in competition with the treasury that's trying to sell a trillion dollars a year at the time.
Interest rates and -- rise substantially.
The federal deficit will go up every 1% rise in interest rates won't calls -- hundred billion dollars.
To the federal treasury.
When these so mortgage backed securities are sold as they will have to be when the economy -- recover.
The mortgage backed security market small by historic standards.
And these massive so ideals -- morning end up driving up interest rates far more war.
Then they're driving them down now but here's.
A lot of things that chairman here's a really worries me -- Take a look at Ed but the big board today in this 206 and -- point -- -- you take if you -- that.
Did the Fed today and -- -- comments today Ben Bernanke was saying he watches this he watches that the paper.
Wealth effect -- feel good effect that the market hands.
And that was in new wrinkle for me I don't mean to to make a bigger deal out of this -- was warranted.
But he I don't think.
The Fed Chairman to be concerning itself with -- -- moves of the market and when he bases policy.
Pegged to that.
I get nervous.
Well look I -- mile long -- go experienced diminishing -- -- and trying to use monetary policy.
As a substitute for -- fiscal policy and bad revelatory but he's the only guy and tell I guess I don't -- just.
Well it is the only guy in town will remember these actions -- for you they'll all going to have to be reversed.
Winning gods a good time we have a full blown recovery and when they do they're going to drive up interest rates more than they're driving them down now also see.
Don't think unit and saw it was a -- you don't think in other words that that he obviously -- the priority on the real inflation risk be Dan.
Did -- the economy sick enough that it warrants is included a three year promised to keep rates as low as they are on.
And that that once -- stabilize.
Inflation.
Would be the lesser wary anywhere you don't agree.
Well look.
The the American economy is ultimately going to overcome not only the disease but the absurd prescription of the doctor.
I happen to believe the election could speed that process up.
But the bottom on leaders.
When the recovery comes all other things that have been done in the last 55 months -- -- -- have to be reversed.
And when everybody knows that right -- -- to fall by a modest amount.
That the economy is -- respond by a modest amount now.
He -- -- foolish to do things that are going to have to be reversed later when there's every reason to believe that interest rates are going to go up more.
And the recovery is going to be impeded by that action.
-- -- -- -- -- -- -- -- Well I'd -- obviously one of the stated goals is to create a wealth effect through the stock market but what I'm worried about.
He is that.
We're doing things -- on helping much now that nobody believes can help very much but they're born to hurt a lot when the recovery comes.
And I just like it's a bad trade -- good decisions.
-- represent Schwartz is based on more original -- -- marginal benefits the more Agile benefited very very low and falling.
The more original -- -- born to be when the recovery starts and it's going to happen.
I mean we're not -- off America here.
Welcome senator program thank you very much.
