Rep. Ryan: New Fed policy a ‘bailout’ for Obama economy

Rep. Paul Ryan (R-Wis.) said the Federal Reserve's latest policy shift amounts to a "bailout" of the economy under President Obama.

Speaking at a campaign event in Oldsmar, Fla., Mitt Romney's vice presidential candidate lambasted the Fed's recent decision to try and do more to boost the economy as "sugar high economics."

"We don't need synthetic money creation. We need economic growth. We want wealth creation," he said. "We don't want to print money. We want opportunity and growth.”

ADVERTISEMENT
On Thursday, the Fed announced it was embarking on a third round of "quantitative easing," in which it would buy up $40 billion of bonds every month. But in a new move, the Fed said this time it would be continuing the purchases until it was satisfied with the rate of growth in the labor market — the past two rounds of easing were set at a specific volume of purchases. The Fed also said it expected to keep interest rates near zero until mid-2015 (it had previously predicted rates would stay low until the end of 2014), and that it was willing to do more if it found it necessary.

The Romney-Ryan ticket, along with congressional Republicans, were fiercely critical of the move when it was announced, and used its existence as proof that the president's attempts to turn around the economy have failed.

"We heard that the Federal Reserve is coming with a new bailout," Ryan said Saturday, to grumbles from the crowd. "This matters. So the Federal Reserve is basically saying that we don't have a recovery. 'Obamanomics' didn't work."

Ryan has long been critical of the Fed's recent attempts to boost the economy, warning the massive purchases and easy money policies are encouraging damaging inflation down the line. Ryan has joined other congressional Republicans in pushing legislation that would trim the Fed's mandate, so that instead of focusing on both controlling inflation and maximizing employment, the central bank would only be occupied with keeping prices stable — leaving the job-creating policies up to Congress.

The Obama campaign swung back on Ryan's remarks, saying the lawmaker in promoting the policies of the Romney-Ryan ticket was in no position to tout support for the middle-class.

"Congressman Ryan has no credibility when it comes to helping the middle class. The Romney-Ryan plan is to raise taxes on middle class families by cutting benefits like the mortgage interest deduction, the child tax credit, and the charitable deduction to pay for $250,000 tax cuts for multi-millionaires like Mitt Romney," said Danny Kanner, campaign spokesman. "And when it comes to standing up to Wall Street, the Romney-Ryan plan is to allow the biggest banks to write their own rules again. That’s not a recipe for strengthening the middle class – it’s the same failed formula that crashed our economy and devastated the middle class in the first place."