If you count operation twist as QE, we’re at least on the fourth try. This QE is “unlimited,” (economics has gotten much more scientific in recent decades, in case you hadn’t heard) so I think QE4eva is a much more apt title.
One would hope that this would be true: “The good news is, when we go into a recession in 2013 well be able to say, DEFINITIVELY, that QE doesn’t work.”
Err, nevermind. Professor Sumner says that we’ll never know.
See how scientific economics has become? Would just one falsifiable statement be too much to ask for?
It looks like the Fed will buy more than 50% of new Fannie and Freddie mortgages. So, I guess the sage advice we’re getting from modern economics profession is that the best way to recover from a housing bubble is to start another housing bubble.
That’s almost as absurd as cheering for this operation to buy unlimited amounts of mortgages while demanding that housing costs come down.
I always thought that economics was nicely encapsulated in the statement: there’s no such things as a free lunch. I guess somewhere along the line they discovered free lunches: “I see this as a free lunch, and I am quite curious to find out just how big or small of a free lunch it is going to be.”
This stuff basically makes fun of itself. I give up.
Let’s give Hayek the last word:
The increased dependence of the individual upon government which inflation produces and the demand for move government action to which this leads may for the socialist be an argument in its favor. Those who wish to preserve freedom should recognize, however, that inflation is probably the most important single factor in that vicious circle wherein one kind of government action makes more and more government control necessary. For this reason, all those who wish to stop the drift toward increasing government control should concentrate their efforts on monetary policy. There is perhaps nothing more disheartening than the fact the there are still so many intelligent and informed people who in most other respects will defend freedom and yet are induced by the immediate benefits of an expansionist policy to support what, in the long run, must destroy the foundations of a free society.