by Congressman Dennis Kucinich
Washington, Nov 4, 2010
Congressman Dennis Kucinich (D-OH) responded to the Federal Reserve’s announcement yesterday of an initiative to purchase up to $600 billion of Treasury securities. The Fed’s injection of money into the economy is supposed to have a stimulative effect by reducing borrowing costs and spurring companies to borrow for the purpose of expanding their businesses. Kucinich described the Fed’s initiative as hollow for Main Street since it is not a plan to reduce unemployment.
“Republican leaders have made clear they have no plans to use the power of government to stimulate the economy, invest in job creation and spur job growth. The Fed’s plan is to give banks more money to finance the private sector job creation. But banks have ample cash now; they aren’t lending, and the private sector is not creating the jobs. That is why we have 15 million people unemployed,” Kucinich said.
Kucinich pointed out that the Federal Reserve is under a mandate, known as the Humphrey-Hawkins Full Employment and Balanced Growth Act, to take actions to promote maximum sustainable employment. Critics have noted the Fed’s longstanding failure to comply with this law. “Without a plan to add jobs to the economy so that businesses have consumers to sell to, the Fed takes a real risk that the money being introduced will simply be hoarded by banks unwilling to lend,” Kucinich continued.
“The Fed should be financing government investment in badly-needed infrastructure repair. This would create jobs and help the Fed fulfill its mandate of promoting low unemployment, instead of being an elite, unaccountable institution that exists solely for the benefit of bankers,” Kucinich added.
Congressmen Dennis Kucinich and Ron Paul (R-TX) are leading the call in Congress for oversight of the Federal Reserve. Kucinich sponsored legislation to provide the Government Accounting Office the authority to audit the Federal Reserve’s trillion dollar response to the economic crisis.