Dr. Ben Carson, a potential Republican presidential candidate, holds mixed views about the Federal Reserve. "There are both good and bad things about the Fed," he told
Forbes.com.
On the plus side, "it certainly is a stabilizing force for financial markets and has been helpful in averting panic in many situations," he argued.
But on the minus side, "the big problem today is that its artificial suppression of interest rates changes circumstances that people used to count on for retirement and small business opportunities."
The Fed has kept its federal funds rate target at a record low of zero to 0.25 percent since December 2008.
"When reasonable interest rates were in place, a person could work steadily for decades putting aside 5 to 10 percent of their weekly income into a retirement account and expect a reasonable return," Carson explained.
"That is no longer the case, and many people who were formerly hard-working and self-sufficient are looking for other ways to ensure their long-term security."
Low interest rates also act as a disincentive for banks to lend to individuals and small businesses. "We need to enact Fed policies that take these situations into account," Carson noted.
David Stockman, White House budget director under President Reagan, offers harsher criticism of the central bank.
"Never before in the history of the world has any central bank or other monetary authority decreed that overnight money shall be indefinitely free to gamblers, or that liquid savers should have their hard earned wealth chronically confiscated by negative returns after inflation and taxes," he wrote on his
Contra Corner blog.
Economists' consensus is that the Fed will raise rates around mid-year, but it could wait longer, Stockman noted.
"So an urgent question screams out. Don't these obstinate zealots realize that zero cost overnight money has only one use, and that is to fund the carry trades of Wall Street gamblers?" he asked.
"These benighted folks at the Fed are actually fueling their own hellish financial storm, thereby leaving in mortal danger the main street economy."
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