I wrote a pretty critical piece on Paul Volcker the other day for calling for higher taxes on the back of high budget deficits. Unfortunately, Ben Bernanke, speaking this evening, has done exactly the same thing. He said:
“To avoid large and ultimately unsustainable budget deficits, the nation will ultimately have to choose among higher taxes, modifications to entitlement programs such as Social Security and Medicare, less spending on everything else from education to defense, or some combination of the above.”
Unlike Volcker, I have never been a big fan of Bernanke’s, but I will spare everyone the rant on his mistakes. This is more absurdity from our leadership. Tax increases would crush any sliver of a recovery we might be seeing. What we really need is more efficient spending (this is not the time for healthcare or paying banker salaries), lower taxes, and more regulation. Of course, none of this surprises me. I would be utterly shocked if we look back at Ben Bernanke in 10 years and describe him as anything other the second most destructive central banker in the history of the U.S. economy. We are repeating all the same mistakes of Japan and Greenspan only on a much larger scale.