Monetary and Fiscal Policies Make a Difference

The Federal Reserve can do just so much with monetary policy. The financial media are constantly concerned with Fed policy, especially when the economy is in dire economic panic as it is today.

What will the Fed do to relieve unemployment? What will the Fed do to get the economy booming again?

This emphasis on the Federal Reserve is incorrect and misleading. There is little the Fed can do when the cost of money is already close to zero, thanks to its efforts.

You have, instead. to turn your attention to the president in the White House and the Treasury, and its fiscal policy. Monetary policy is important but so is fiscal policy.

The Treasury, under the control of the president, is doing its own thing with a fiscal plan that can totally negate the Fed’s monetary policy, and now does.