The Fed’s scandalous monetary policy -- By Scott Powell, The Washington Times

Rock-bottom interest rates are the great enabler of Washington overspending 

As the vote on Obamacare approached in 2010 — a year when the budget deficit was a staggering $1.3 trillion — the Democratic majority ignored the opposition's concerns about the costs and unintended consequences of restructuring the entire health care system. It was also the year that Federal Reserve Chairman Ben S. Bernanke rolled out Phase Two of his controversial policy known as quantitative easing — QE, for short.

As Mr. Bernanke explained, the purpose of QE was to help the private economy. The Fed would buy long-term bonds with its newly printed dollars for the purpose of raising the price and lowering the yields of those bonds. By pushing rates down, QE would drive investors into equities in search of higher yields. This supposedly creates a "wealth effect" whereby the 10 percent of Americans who own about 80 percent of the stocks would spend more, invest more and create opportunity for the other 90 percent.

QE may have started out with that objective, but after four years of failure to spur job growth, which has also been accompanied by a widening gap between the rich and the poor and the piling up of $5-trillion-plus of new federal debt, it's apparent that QE's purpose has morphed. By manipulating and maintaining interest rates at abnormally low levels, QE has also become the great enabler of Washington's spending and its appetite to buy votes and gain centralized power.

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