Dallas Fed President Richard Fisher says the second round of quantitative easing can’t stimulate the economy on its own and that the Fed needs government support, according to CNBC.
There is already a lot of liquidity out there, according to Fisher, but with businesses in “defensive crouch” it isn’t being used.
Fisher argues that the Federal government needs to get out of the way, and incentivise businesses to invest. He did, however, point out that an increase in government debt would not be the best way to achieve this.
What is interesting about Fisher’s comments is that as an FOMC member, he’s admitting that QE 2 isn’t primed for success if and when it comes. He is also suggesting that the federal government needs to step in, to “incentivise work.”
And while the specifics are weak here, the question is why businesses would be interested in investing when they don’t see the demand from consumers. Right now, that demand is the biggest concern for small businesses, according to a survey from the National Federation for Independent Businesses (via the New America Foundation).
Photo: New America Foundation
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