The Week in Review | Debt Sweat | Printing Money – and its Price | PETER S. GOODMAN | New York Times | Dec 27, 2008
So it may seem perverse that in this new era of reckoning — with consumers finally tapped out, government coffers lean and banks paralyzed by fear — many economists have concluded that the appropriate medicine is a fresh dose of the very course that delivered the disarray: Spend without limit. Print money today, fret about the consequences tomorrow. Otherwise, invite a loss of jobs and business failures that could cripple the nation for years.
Such thinking carries the moment as President-elect Barack Obama puts together plans to spend more than $700 billion on projects like building roads and classrooms to put people back to work. It is the philosophy behind the Federal Reserve’s decision to drop interest rates near zero — meaning that banks can essentially borrow money for free — while lending directly to financial institutions. This is the mentality that has propelled the Treasury to promise up to $950 billion to aid Wall Street, Detroit and perhaps other recipients.