The president and Congress need to enact fiscal policies to get the country moving again, according to Federal Reserve Bank of Dallas president Richard Fisher, who said the Fed “has done everything it can, and more.”
He assailed “indecision and political mischief” from “both ends of Pennsylvania Avenue.” Fisher declared: “If the American dream is to survive, we will need to re-create a fiscal and regulatory environment that in conjunction with the Fed conducting prudent monetary policy will liberate the forces of entrepreneurial risk taking that have always been America’s hallmark, and that allowed successor generations to live far better lives than their parents ever thought possible.”
Despite cash on a balance sheet, a compliant banker, and cheap money, firms won’t “commit substantial capital” to expand payroll or invest in equipment or plant upgrades.
That is, Fisher added, “until you know what it will cost you to run your business; until you know how much you will be taxed; until you know how federal spending will impact your customer base; until you know the cost of employee health insurance; until you are reassured that regulations that affect your business will be structured so as to incentivize rather than discourage expansion; until you have concrete assurance that the fiscal fix the nation so desperately needs will be crafted to stimulate the economy rather than depress it and incentivize job creation rather than discourage it; or until you are reassured that the sinkhole of unfunded liabilities like Medicare and Social Security that Republican- and Democrat-led Congresses and presidents alike have dug will be repaired so that our successor generations of Americans will prosper rather than drown in dark, deep waters of debt.”
It’s time for a leader to “take a position that is neither safe, nor politic, nor popular,” but is the right move, Fisher told the Austin Chamber of Commerce, according to a prepared text of the speech released by the Fed.
“Honorable members of Congress and presidents past, Republicans and Democrats alike, have conspired over time, however unwittingly, to drive fiscal policy into the ditch,” he said.
“They purchased their elections and reelections with popular programs so poorly funded that they now threaten the economic well-being of our children and our children’s children. Instead of passing the torch on to the successor generation of Americans, they have simply passed them the bill. This is the opposite of honorable.”