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Thursday, January 16, 2014

Bernanke Discusses His Logic During the Fiscal Crisis

Understanding the logic of decision makers impacts how crisis and problems are understood. The process of fiscal policy is a negotiation based upon position, players, events and participants. Eventually an approach is formed and enacted. It is easy to second guess policy in hindsight but it is much more difficult to find a path while events are unfolding. In many decisions there is no right or wrong but only possibilities based upon information available at the time and the person (s) interpreting that information. However, sometimes it is beneficial to think beyond today and create surpluses that reduce systematic costs of borrowing in the future as well as have opportunities to use infusion liquidity as one of many possible tools. Each decision-maker works within the context of what is currently available, past context, and projected possibilities.

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