| 摘要 | Day traders and their acolytes tried to pressure the Federal Reserve to open the money spigots wider this week. They called for QE3, a third round of unprecedented quantitative easing. Fortunately, the Fed said no to QE3, at least for now. But it did vote to continue its super-easy, zero-interest-rate policy until mid-2013, well after the next presidential election.
The main effect would be a further devaluation of the dollar against competing currencies and gold, followed by a rise in the price of oil and other imports. Inflation is now at the edge of the Fed’s comfort range, which is below 2%. Money growth (M2) reached 10% for the past six months, presaging more inflation ahead.
Advocates of more short-term stimulus make several fundamental mistakes. One is excessive attention to near-term data and neglect of the longer term. The Fed almost never discusses the longer-term consequences of its actions. That’s a mistake. Short-term forecasts, including theirs, are subject to large errors.
Certain economists demand more stimulus at every opportunity. They castigate the president for agreeing to budget cuts and predict terrible consequences. Yet any current spending reductions are small, and their effect will be like a rounding error in gross-domestic-product figures. Most of the budget reductions are in the future and may or may not occur after the 2012 election. Proponents of short-term stimulus fail to mention that raising the debt ceiling by $900 billion permitted the administration to increase current spending.
Others call for raising the Fed’s inflation target to 4%, 5% or higher. Treasury debt has an average maturity of three to four years. A higher inflation target would increase the deficit by raising the interest rate the Treasury would have to pay when it rolled over its debt.
A large part of our current unemployment problem reflects the unsold stock of housing left from mistaken past housing policies. We cannot quickly convert most carpenters and bricklayers into computer operators. Short-term policy actions will not solve that problem. But population growth, falling housing prices and rising rents will eventually help by stimulating enough new construction to put many in the housing industry back to work.
The U.S. also has to make a major transition from a consumption economy to one that exports more and grows consumer spending more slowly. That transition has started, but it will not occur quickly. Those who look to consumption spending to recover its old path are hoping for a past that should not return.
“How can the Fed know now that a zero-rate policy will be required two years from now? It can’t.” — Allen H. Meltzer
Increased domestic saving and slow consumption growth will help the transition to an export-led economy by reducing foreign borrowing. Foreigners owned $4.5 trillion of our debt at the start of this year. We can only service that debt by increasing exports and reducing imports and consumption growth. We have benefitted for decades from what former French President Charles de Gaulle famously called the “exorbitant privilege” of borrowing in our own currency while most countries borrow in a foreign currency. Now we must service existing debt and reduce foreign borrowing. As interest rates rise, servicing costs also rise. The transition will not be easy. It will require sustained productivity growth, a higher rate of business investment, much better education of the work force, reduced imports, and slower consumption growth.
Our problems will not be solved by stop-gaps like QE3 or lower labor taxes, but they are not intractable. What we need most is confidence in our future. That calls for:
Reducing corporate tax rates permanently to encourage investment (paid for by closing loopholes).
Agreeing on long-term reductions in entitlement spending.
A five-year moratorium on new regulations affecting energy, environment, health and finance.
An explicit inflation target between zero and 2% to force the Fed to pay more attention to the medium term and to increase public confidence that we will not experience runaway inflation.
Some will read this as heartless disregard of the unemployed. It is, instead, based on an analysis of the problems we face and what is required for a transition that puts us back on our historic growth path with good wages resulting from higher productivity. Short-term stimulus will not get us there. Even if some stimulus could raise the near-term growth rate to double or triple the 0.8% of the first half of this year, it will reduce the unemployment rate very little.
The president is wrong to pose the issue as more taxes for millionaires to pay for more redistribution now. That path leads to future crises because higher taxes support the low productivity growth of the welfare state, delay the transition to export-led growth, and do not reduce future budget liabilities enough.
The central issue facing the U.S. is whether we turn away from unsustainable budget and trade deficits toward an economy that grows at historic rates with low inflation. More redistribution now won’t do that. More investment and productivity growth now will, and it will also provide more resources to pay for a greater share of future health-care costs at lower tax rates.
Allan H. Meltzer is a visiting fellow at AEI.
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