Excerpts from a speech yesterday by Pennsylvania Senator-Elect Pat Toomey to the Pennsylvania Manufacturers' Association:
“The problems with our economy are fundamentally not monetary and certainly not a lack of money supply . . . Quantitative easing is the wrong tool. It is tantamount to using a hammer when you need a wrench. That’s not a good way to turn a nut.”
“One of the most worrisome consequences of QE2 is the impact on government finances. Part of the Fed’s objective is to create higher inflation expectations by actually inducing higher inflation now. But higher inflation almost certainly means higher interest rates.”
“I think this is a very dangerous path the Fed is taking and we should have a vigorous public debate about it, including members of Congress.”
“We ought to consider what drives the Fed to frequent excesses – especially excessive easing such as that epitomized by QE2. I believe it is the Fed’s dual mandate from Congress – to achieve price stability and maximize employment . . . We all want to maximize productive employment, but the question is whether or not this is a suitable mission for the Federal Reserve. I am increasingly coming to the view that it is not.”
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