Sunday, July 22, 2012

Country Needs More from Congress, Less from Fed Read more: Economist Robert Brusca: Country Needs More from Congress, Less from Fed

The country needs for its congressmen to ditch their ideologies, work to solve worsening fiscal woes and give the Federal Reserve a break from stimulating the economy, said Robert Brusca, chief economist at FAO Economics.

So far, the Fed has taken the lead to get the economy moving again.

The measures the Fed has taken have included cuts to benchmark lending rates to near 0 percent to encourage investment and hiring, bond buybacks from banks that pump the economy full of liquidity and also push down borrowing costs — a powerful tool known as quantitative easing (QE) — and a reshuffling of its Treasury holdings by stocking up on longer-dated securities and selling shorter-dated ones to further push rates down, a tool known as Operation Twist.

Rates are low enough, and now it’s time for Congress to act by agreeing on ways to make long-term fiscal reforms.

“I don’t believe in leprechauns, I don’t believe in Santa Claus and I don’t believe in QE," Brusca told Newsmax.TV in an exclusive interview. "I don’t think QE does much for the economy. I think QE is something the Fed does to sort of give us the illusion that it’s helping us along,” Brusca said.

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