Dear Sirs:
As you note, the Fed has held “its benchmark rate near zero…since December 2008”, but without the result promised by econometric models. Therefore, those Keynesian economists you quote want even more money printing. They sound like witch doctors who have stood over a patient for six years, rattling bones and blowing smoke to no avail. Now they are consulting Colonial era specialists, who advocate bleeding the patient until he recovers. I recommend that they advance at least one hundred years to the era of the marginalist revolution of the Austrian school and stop money printing all together. Money is a medium of exchange and nothing more. Its uses as a means to settle accounts and as a store of value derive from this foundational utility. Printing more money simply reduces each unit’s usefulness, what Austrians call its “diminishing marginal utility”. The witch doctor and Colonial era physicians are going to drive the dollars marginal usefulness to zero, and America will experience the same wonderful benefits of cheap money as did the Germans of the Wiemar Republic and more recent Zimbabweans.
Patrick Barron
