So When Will Jeb Hensarling Support Fiscal Stimulus?

The headline news is that the Federal Reserve has finally adopted QE3. But let’s focus in on what one prominent Republican member of the House of Representatives said:

Republicans were swift to criticize the development, and characterize it as a consequence of Obama’s poor stewardship of the economy. “There is no clearer indication than today’s Fed action that after 3 ½ years, the president’s economic policies continue to fail,” said Rep. Jeb Hensarling (R-TX), chair of the House GOP conference, in an official statement. “At a time of negative real interest rates and trillions in excess reserves, there is little which monetary policy can achieve today to promote economic growth and much the Fed risks by today’s announcement…. There are limits to what monetary policy can achieve, and it’s clear the Fed has reached them.”

Maybe there are indeed limits to what the Federal Reserve can achieve when an economy is so depressed that we have nominal interest rates near zero. Of course, this means that we desperately need fiscal stimulus. President Obama understands this and has proposed stimulus measures. Alas these same Republicans have yet to pass such needed measures.