{"id":2452796,"date":"2025-06-27T09:24:02","date_gmt":"2025-06-27T13:24:02","guid":{"rendered":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/no-the-federal-reserve-shouldnt-monetize-the-national-debt\/"},"modified":"2025-06-27T09:26:07","modified_gmt":"2025-06-27T13:26:07","slug":"no-the-federal-reserve-shouldnt-monetize-the-national-debt","status":"publish","type":"post","link":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/no-the-federal-reserve-shouldnt-monetize-the-national-debt\/","title":{"rendered":"No, The Federal Reserve Shouldn\u2019t Monetize The National Debt"},"content":{"rendered":"<aside class=\"mashsb-container mashsb-main mashsb-stretched\"><div class=\"mashsb-box\"><div class=\"mashsb-count mash-medium\" style=\"&quot;\"><div class=\"counts mashsbcount\">18<\/div><span class=\"mashsb-sharetext\">SHARES<\/span><\/div><div class=\"mashsb-buttons\"><a class=\"mashicon-facebook mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/www.facebook.com\/sharer.php?u=https%3A%2F%2Fwww.conservativenewsdaily.net%2Fbreaking-news%2Fno-the-federal-reserve-shouldnt-monetize-the-national-debt%2F\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Facebook<\/span><\/a><a class=\"mashicon-twitter mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/twitter.com\/intent\/tweet?text=&amp;url=https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=2452796&amp;via=ConservNewsDly\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Twitter<\/span><\/a><a class=\"mashicon-subscribe mash-medium mash-nomargin mashsb-noshadow\" href=\"#\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Subscribe<\/span><\/a><div class=\"onoffswitch2 mash-medium mashsb-noshadow\" style=\"display:none\"><\/div><\/div>\n            <\/div>\n                <div style=\"clear:both\"><\/div><\/aside>\n            <!-- Share buttons by mashshare.net - Version: 4.0.47--><p>The article discusses former President Donald Trump&#8217;s criticisms of Federal Reserve Chair Jerome Powell, particularly regarding interest rate policies. trump has expressed a desire for lower interest rates, arguing that reductions to between 1% and 2% could save the United States up to $1 trillion annually. However, this strategy could undermine purchasing power for average Americans, especially seniors dependent on fixed incomes. The article critiques the approach Trump advocates,noting that it mirrors the Democrats&#8217; previous reliance on <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/secy-yellen-dismissed-concerns-of-double-digit-inflation\/\" title=\"Secy. Yellen dismissed concerns of double-digit ...\">low interest rates<\/a> during the Biden governance,which fueled inflation due to excessive spending. <\/p>\n<p>The author argues that rather than pressing the Fed for lower rates to ease federal borrowing, Trump should focus on urging Congress to reduce spending. They emphasize that relying on monetary policy to manage fiscal issues will not address the underlying spending problems and could exacerbate inflation, which voters overwhelmingly rejected in the past. The piece concludes that enduring solutions to the nation&#8217;s <a href=\"https:\/\/amzn.to\/3YuVZYV\" >fiscal challenges require difficult spending cuts<\/a> rather than temporary fixes, highlighting the need for real fiscal duty from lawmakers.  <\/p>\n<p class=\"readmore\">\n    <button onclick=\"showReadMore()\" id=\"readmorebtn\">Read more&#8230;<\/button>\n<\/p>\n<hr id=\"line\">\n<span id=\"more\"><\/p>\n<div>\n<p>The Federal Reserve&rsquo;s bad policy under Democrat presidents should not continue under a Republican one. That&rsquo;s one takeaway from President Donald Trump&rsquo;s most recent complaints toward Fed Chair Jerome Powell.<\/p>\n<p>While Trump has advocated lower interest rates <a href=\"https:\/\/thefederalist.com\/2018\/10\/29\/attacking-federal-reserve-trump-actually-attacks-savers\/\" target=\"_blank\" rel=\"noreferrer noopener\">for years<\/a>, he has done so recently because Congress <a href=\"https:\/\/www.wsj.com\/economy\/central-banking\/federal-reserve-interest-rates-pressure-trump-4ffd1edd?mod=RSSMSN\" target=\"_blank\" rel=\"noreferrer noopener\">will not do its job<\/a> and reduce spending &mdash; at least, not enough to manage federal debt and deficits. Using monetary policy to aid fiscal policy &mdash; in layman&rsquo;s terms, monetizing the federal debt &mdash; would only yield another round of the same type of pernicious inflation that helped Trump boot Joe Biden out of office eight months ago.<\/p>\n<h2><strong>Lower Debt Costs?<\/strong><\/h2>\n<p>In a recent <a href=\"https:\/\/truthsocial.com\/@realDonaldTrump\/posts\/114717929371967424\" target=\"_blank\" rel=\"noreferrer noopener\">lengthy Truth Social post<\/a>, Trump claimed that Powell &ldquo;could do the biggest and best job for our Country by helping to lower Interest Rates and, if he reduced them to the number they should be, 1% to 2%, that &lsquo;numbskull&rsquo; would be saving the United States of America up to $1 Trillion Dollars[[<em>sic<\/em>]per year.&rdquo;<\/p>\n<p>Both halves of that equation are important. Lowering interest rates to 1-2 percent, while most measures of inflation remain somewhere between 2-3 percent, means that the average American account would see the purchasing power of their money eroded each month, as they have while the Fed pursued its policy of <a href=\"https:\/\/thefederalist.com\/2021\/07\/16\/why-you-should-blame-the-federal-reserves-easy-money-for-todays-inflation\/\" target=\"_blank\" rel=\"noreferrer noopener\">quantitative easing<\/a> (i.e., money printing) for much of the past two decades.<\/p>\n<p>Below-inflation interest rates may well suit the self-proclaimed &ldquo;King of Debt.&rdquo; But they serve as a <a href=\"https:\/\/thefederalist.com\/2018\/10\/29\/attacking-federal-reserve-trump-actually-attacks-savers\/\" target=\"_blank\" rel=\"noreferrer noopener\">tax on savers<\/a> &mdash; particularly seniors on fixed incomes, who have to manage a defined set of pension assets to last throughout their retirement.<\/p>\n<h2><strong>Backfired for Democrats<\/strong><\/h2>\n<p>Trump is calling for low interest rates because he wants to lower the cost of financing the federal debt. That amounts to the same position Democrats wrongly took during the Biden years, when they manufactured artificially low interest rates through the Federal Reserve&rsquo;s printing presses to fund their Covid spending spree.<\/p>\n<p>But as I <a href=\"https:\/\/thefederalist.com\/2021\/11\/17\/how-the-federal-reserve-keeps-stoking-inflation\/\" target=\"_blank\" rel=\"noreferrer noopener\">noted at the time<\/a>, that was bad policy by both Congress and the Federal Reserve. Powell&rsquo;s biggest mistake of his tenure as Fed Chair occurred in the fall of 2020, when he <a href=\"https:\/\/www.cnbc.com\/2020\/10\/06\/fed-chair-powell-calls-for-more-help-from-congress-says-theres-a-low-risk-of-overdoing-it.html\" target=\"_blank\" rel=\"noreferrer noopener\">claimed<\/a> that &ldquo;the recovery will be stronger and move faster if monetary policy and fiscal policy continue to work side by side to provide support to the economy.&rdquo;<\/p>\n<p>Such comments resulted in trillions of dollars, more &ldquo;emergency&rdquo; spending from Congress &mdash; at a time when the economy was recovering from Covid lockdowns, and the Federal Reserve was printing money via quantitative easing into the spring of 2022. We all know what happened then: the <a href=\"https:\/\/thefederalist.com\/2021\/11\/17\/how-the-federal-reserve-keeps-stoking-inflation\/\" target=\"_blank\" rel=\"noreferrer noopener\">largest bout of inflation<\/a> in a generation.<\/p>\n<p>Trump wants the Fed to lower rates &mdash; and risk another inflation spike &mdash; for much the same reason Democrats did four years ago: so lawmakers can continue to spend money that Washington doesn&rsquo;t have, in this case, via lower debt service costs. On the one hand, it&rsquo;s possible to have some sympathy for those trying to clean up the hangover caused by Democrat overspending. On the other hand, if lawmakers didn&rsquo;t and don&rsquo;t want to make tough choices, they shouldn&rsquo;t have run for office in the first place.<\/p>\n<h2><strong>Stop Over-Spending<\/strong><\/h2>\n<p>Trump may think that jawboning Powell into <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/biden-sees-double-digit-drop-in-approval-among-black-voters-even-worse-among-young-black-voters-survey\/\" title=\"Biden Sees Double-Digit Drop In Approval Among Black Voters, Even Worse Among Young Black Voters: Survey\">cutting interest rates<\/a> will solve his problem. It seems much more likely to create another by sparking the return of inflation that the public loudly demonstrated they loathe last November. Besides, cutting federal spending isn&rsquo;t Jerome Powell&rsquo;s job &mdash; that lies with Congress.<\/p>\n<p>If Trump wants to jawbone anyone, he should demand much deeper spending reductions from lawmakers, including for the programs that are consuming a <a href=\"https:\/\/thefederalist.com\/2024\/06\/24\/two-trillion-dollar-deficits-show-washington-has-a-spending-problem\/\" target=\"_blank\" rel=\"noreferrer noopener\">growing share of the budget<\/a>. As one expert noted in <a href=\"https:\/\/docs.house.gov\/meetings\/GO\/GO16\/20250624\/118410\/HHRG-119-GO16-Wstate-BurtonD-20250624.pdf\" target=\"_blank\" rel=\"noreferrer noopener\">congressional testimony<\/a> this week, even if we eliminated all federal discretionary spending, which includes functions like K-12 education, federal grants, and virtually the entire defense budget, Washington would <strong><em>still<\/em><\/strong>  run a deficit this year. So perhaps Trump should not have his heads of agencies <a href=\"https:\/\/www.politico.com\/live-updates\/2025\/06\/23\/congress\/oz-cms-gop-medicaid-cuts-provider-tax-00418833\" target=\"_blank\" rel=\"noreferrer noopener\">telling lawmakers<\/a> to scale back the (<a href=\"https:\/\/thefederalist.com\/2025\/06\/02\/why-its-hard-to-make-sense-of-the-mishmash-in-republicans-big-beautiful-bill\/\" target=\"_blank\" rel=\"noreferrer noopener\">still comparatively small<\/a>) reductions to mandatory spending, included in the pending budget reconciliation bill.<\/p>\n<p>Lawmakers of all parties keep thinking that some magic bullet will solve all of the country&rsquo;s fiscal problems. It won&rsquo;t. Most of those quick-fix &ldquo;solutions&rdquo; will only bring the country more grief. The sooner Trump and Congress tackle the tough work of reducing federal spending, the better off we will all be.<\/p>\n<hr>\n<div>\n<p>      Chris Jacobs is founder and CEO of Juniper Research Group and author of the book &#8220;<a href=\"https:\/\/www.amazon.com\/dp\/1645720020\">The Case Against Single Payer<\/a>.&#8221; He is on Twitter: <a href=\"http:\/\/twitter.com\/chrisjacobsHC\">@chrisjacobsHC<\/a>.<\/p>\n<\/div><\/div>\n<p><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Trump argues Fed policy under Democrats shouldn&#8217;t persist with Republicans<\/p>\n","protected":false},"author":521,"featured_media":2452797,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","fifu_image_url":"https:\/\/thefederalist.com\/wp-content\/uploads\/2025\/06\/17123251389_af58cd3023_k.jpg","fifu_image_alt":"","footnotes":""},"categories":[],"tags":[13123,58025,58028,58027,58026],"class_list":["post-2452796","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","tag-economics","tag-federalreserve","tag-fiscalresponsibility","tag-monetarypolicy","tag-nationaldebt"],"fifu_image_url":"https:\/\/thefederalist.com\/wp-content\/uploads\/2025\/06\/17123251389_af58cd3023_k.jpg","_links":{"self":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/2452796","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/users\/521"}],"replies":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/comments?post=2452796"}],"version-history":[{"count":3,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/2452796\/revisions"}],"predecessor-version":[{"id":2452800,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/2452796\/revisions\/2452800"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media\/2452797"}],"wp:attachment":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media?parent=2452796"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/categories?post=2452796"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/tags?post=2452796"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}