Some GOP lawmakers want Uncle Sam to stop printing money — fresh U.S. dollars being used to buy down the ever-burgeoning U.S. debt, according to a Fox News report.
Rep. Mark Kirk, R-Ill., and three colleagues sent a letter to Federal Reserve Chairman Ben Bernanke imploring the Fed to stop monetizing debt — or manufacturing funds to buy U.S. Treasuries.
“Unless we put a stop to the new policy of creating money to cover debts, we will steal our future and end the Founding Fathers' gift of financial integrity. We urge you to rapidly end this new policy of buying U.S. debt with newly created dollars,” the lawmakers wrote.
Joining Kirk in signing the letter were Reps. Leonard Lance, R-N.J., Erik Paulsen, R-Minn., and Dan Burton, R-Ind.
Bernanke maintains resolutely that the multitrillion-dollar Fed plan to inject money into the economy is paramount to keeping the country from sliding downhill to perhaps another Great Depression.
However, four congressmen sounded a clarion call that the freebooting monetary policy inevitably will lead to rocketing inflation and put the country's coveted AAA international credit rating at risk.
“Creating dollars to cover debts gives markets a short term boost at the expense of debasing the dollar and triggering inflation. To date, the Federal Reserve has already created over $130 billion to cover $35 billion of long-term debt and over $100 billion of short-term securities,” they wrote.
The lawmakers' letter reminded Bernanke that, during testimony before the House Budget Committee, he called on Congress to “begin planning now for the restoration of fiscal balance.”
“We support your call to action and ask the Federal Reserve to back that policy by terminating your recent practice of purchasing Treasury securities,” the signers wrote.
Kirk and company further advised Bernanke that the Fed’s policy of creating dollars for use in covering U.S. debts is a new and highly risky policy that threatens to debase the dollar.
The Treasury’s Bureau of Public Debt is borrowing an astounding $160 billion-plus a week to finance the national deficit, they said.
“Lenders to the U.S. government are expressing growing reluctance to buy more U.S. debt. Credit rating agencies are ready to cut Britain's AAA rating — the U.S. may be next,” they warned.
Creating money to cover debt gives markets a short-term boost but risks degrading the dollar and triggering inflation, the congressmen wrote.
The Federal Reserve has created more than $130 billion to cover $35 billion of long-term debt and more than $100 billion of short-term securities, they noted.
“Key policymakers among U.S. creditors, especially in China and Japan, increasingly doubt the wisdom of this new policy," they wrote. "Most investors now see that the United States has embarked on a policy of dollar inflation in a short-sided attempt to replay old debts with newly-created dollars."
In a final flourish, the signers harkened back to the father of the country, President George Washington, writing: "By fully repaying revolutionary war debts incurred by the United States, President Washington granted his country the gift of confidence in the ‘full faith and credit’ of the U.S. government."
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