The Fed can keep printing money

There's more mayhem to come, but don't worry, the Fed can keep printing money and buying private assets.

No wonder the world is scared half to death. The Fed has been creating new vehicles right and left for nearly 18 months, so the problem isn't a lack of liquidity.

The problem is that too few people want to use the liquidity the Fed is creating. They don't want to lend money, or take risks, in part because they never know what Mr. Bernanke and the government might do next.

The new money the Fed has pumped into the economy

The new money the Fed has pumped into the economy to replace the financial-sector liquidity wiped out by the collapse of the bubble has to go somewhere.
It has to end up in someone's bank account .

When we contemplate helping others, whether through volunteer organizations or welfare-state transfers, we are less likely to provide for -- and more likely to abandon -- those who are unlike ourselves.

Abolishing the income tax

Abolishing the income tax. Now that really would be a genuine economic stimulus.

The American economy is broken

The American economy is broken and there is nothing the government can do to fix it. However, the free market does have a cure: it's called a recession, and it's not fun, easy or quick. But if we put our faith in the power of government to make the pain go away, we will live with the consequences for generations.

Something cannot be effortlessly created from nothing.

When the government spends, the money has to come from somewhere. If the government doesn't have a surplus, then it must come from taxes. If taxes don't go up, then it must come from increased borrowing. If lenders won't lend, then it must come from the printing press, which is where all these bailouts are headed. But each additional dollar printed diminishes the value those already in circulation. Something cannot be effortlessly created from nothing.

The importance of things like enterprise, hard work and self-reliance

America was a place where opportunity and risk were both much higher than on early 21st-century.

The bold and enterprising could succeed big, or fail big,without fear of confiscatory taxes or hope of government bailouts.

Getting ahead called for a keen mind, a strong back, and a willingness to work hard and take chances; opportunities to succeed by manipulating laws and regulations were harder to come by.

The importance of things like enterprise, hard work and self-reliance was America.

The Federal Reserve

The Federal Reserve is in the business of central planning instead of central banking.

The Fed's assets have grown much faster than its capital.

The Federal Reserve is itself a highly leveraged financial institution.

The flagship branch of the 12-bank system, the Federal Reserve Bank of New York, shows assets of $1.3 trillion and capital of just $12.2 billion.

Its leverage ratio, a mere 0.9%, is less than one-third of that prescribed for banks in the private sector.