House Budget Chairman Paul Ryan is concerned the Federal Reserve’s plans are taking the nation down a familiar, unsustainable path. The Wisconsin Republican told Fed Chairman Ben Bernanke, the central bank’s had “too loose” of policies in 2003-to-2005 which resulted in the asset bubble bursting.
“I know you don’t agree that. But because you don’t agree with that our fear is that you are just going to repeat these same mistake again, but by orders of magnitude that we can’t even comprehend right now,” said Ryan in hearing Thursday.
The central bank wants to keep interest rates very low until late 2014 in an effort to spur the economy. Ryan said this could lead to fueling asset bubbles and destabilizing prices.
But Bernanke cautioned that Congress should not cut spending or raise taxes too quickly, warning the result could undermine economic recovery. The Fed Chairman admitted the recovery so far has been “frustratingly slow,” but believes 2012 will have stronger growth than last year.
