Bernanke Destroys His Own Credibility

It doesn’t happen every day, but once in a while you see two things happen in the same Congressional committee session.

The first was that Ben Bernanke admitted that the Ticker I wrote a number of days ago on the driver of our fiscal problems (and which I’ve been incessantly pounding the table on, including in Leverage), is in fact true:

The driver of our fiscal problem is not Medicare or Medicaid, it is the medical system generally.

In other words, if we don’t fix it, we’re done.

The second, however was, hidden in Sean Duffy’s (WI-7) Q&A, in which he was grilling Bernanke on the sequester, its impact, and whether a replacement with “more-targeted” cuts would be better (targeting, specifically, fraud, waste and abuse.)

Bernanke got cornered badly, as he wound up admitting that any spending cut would be “bad” from his point of view in the short term, as it would depress GDP.

Well, as I’ve said all alone, duh!

One man’s fraud, waste and abuse is in fact another man’s paycheck!  This is unavoidable.  It’s not that you want it to be that way, but it is that way.

This is the challenge we must accept as Americans:  We must accept that our economy will contract as we remove monopoly practices in the medical system, as we collapse the cost of medical care, as we stop companies from selling unnecessary power chairs and scooters to people and billing the government, as we stop buying $400 toilet seats and $200 hammers, and as we stop building bridges that nobody drives on — the infamous “bridges to nowhere.”

All of those things do in fact add to GDP.

Stealing from the people is additive to GDP but it is nonetheless stealing and must not be tolerated!

The reality of our economy today is that government enables ridiculous levels of theft, fraud and abuse and nobody goes to jail.  Then, when anyone talks about getting rid of that fraud, theft, and abuse the screaming starts about how it will “harm the economy.”

I’m sure that Bernanke would like to have that 5 minutes back to “do it over”; unfortunately for him Sean Duffy thinks faster on his feet than Ben Bernanke does, and Bernanke wound up admitting that there is no budget cut — not even a cut of fraud, waste or abuse — that he will endorse in the immediate term.

Thank you for admitting you are in favor of robbing the citizens Ben.  

Impeachment proceedings for Bernanke, in a just society, would begin tomorrow.