David Stockman Quotes

At the end of the day, it's not a normal condition to have interest rates at zero.

I never liked quantitative easing. It's misunderstood by almost everybody. Flattening the yield curve is not stimulative; flattening the yield curve is anti-stimulative.

Long before folks fretted the demise of 'quantitative easing,' I fretted its existence. It proved the reverse of its image, an antistimulus, and we've done okay not because of it, but despite it.

The history of interest rates is really the history of inflation. When inflation is high, interest rates are high, and when inflation is low, interest rates are low.

The Fed contributed to the financial crisis, keeping interest rates too low for too long. I give them credit for responding and stabilizing the economy and the financial sector during the crisis. But then they tried to do too much with quantitative easing that went on forever, just dramatically exploding their balance sheets.

All the central banks are doing is substituting one form of debt with another form of debt. They're issuing short term debt and using it to buy long term debt. In finance, we tend to think that's a neutral activity, even though those stimulus programs are huge.

It's appropriate for the Fed to gradually and cautiously increase our overnight interest rate over time.

I don't think quantitative easing is deliberately misleading, but I do think it's suspiciously bland and reassuring. It doesn't sound like anything big, experimental, scary and strange - which is what many economists think it is.

Forget quantitative easing - I've always thought the idea of injecting virtual money into the system is an accident waiting to happen.

The risk is that as we come out of this recession, we'll have so much debt to finance, we'll either have to have inflation or very high interest rates to continue to borrow the money, or both. That's a risk.

That is to say, under the old way any time we wish to add to the national wealth we are compelled to add to the national debt. Now, that is what Henry Ford wants to prevent. He thinks it is stupid, and so do I, that for the loan of $30,000,000 of their own money the people of the United States should be compelled to pay $66,000,000 - that is what it amounts to, with interest.

The problem is, if at all, in the different view of the economy, of economic growth. Growth is too low, even for us. That needs to change: More investments, a stronger role by the European Central Bank. Otherwise, there are no tensions between Italy and Germany. But on this point, compromises must be reached and we will reach them.

I think the role of the Federal Reserve is enormously exaggerated.

I think it is inflationary. I think it actually is counterproductive in many ways. You end up costing jobs from people who are at the bottom rung of the economic ladder.

The Fed is the greatest hedge fund in history.

The time will come, and probably during 2009, that the only way the U.S. will be able to fund its deficits is to create money by printing it. The Treasury will have to sell bonds, and, in the absence of foreign buyers, the Fed will have to print the money to buy them. The consequence will be runaway inflation, increasing interest rates, recession, and inevitable tax increases on all Americans.

I think what the American people are going to see down the road is significant inflationary pressure as a result of all this government printed, you know, this new money that the government is putting in.

Diluting the money supply with paper is the moral equivalent of diluting the milk supply with water.

We could, of course, always make the payments, simply by printing more money - we simply promise to pay people by giving them dollar bills - but that could set off inflation.

A snarky but accurate description of monetary policy over the past five years is that the Federal Reserve successfully replaced the technology bubble with a housing bubble

A money-financed tax cut is essentially equivalent to Milton Friedman's famous 'helicopter drop' of money.

No central banker would disagree with the proposition that inflation is primarily a monetary phenomenon. Not one of them will disagree that every inflation has been accompanied by a rapid increase in the quantity of money and every deflation by a decline in the quantity of money.

I think I understand the Constitution a little bit because in 1971 we went off the gold standard under President Nixon into the Federal Reserve notes because we were a worldwide currency.

At best, in such depression times, monetary policy is a feeble reed on which to lean.

Abenomics, quantitative easing, fiscal policy - we know all the issues.