Concerns swirled around Washington D.C. and New York today as leaders in the United States' political and economic capitals fretted about the impact of a partial shutdown of a Bureau of Engraving and Printing facility in Fort Worth, Texas. The facility produces half of the paper currency in the United States and since Monday has been operating at 25% capacity due to a technical error in several of its printing machines.
In a speech to the Economic Club of New York Federal Reserve chairman Ben Bernanke made clear the urgency of the situation, "We all know that the foundation of economic growth is printing enough money to meet the government's spending needs. What's happening now in Fort Worth is very troubling . We at the Federal Reserve are monitoring things very carefully and are prepared to act if needed."
Bernanke went on to say that if the printing presses stayed down for "an extended period" the Fed could take emergency measures to make up for the shortfall of direct monetary stimulus including reducing its member banks' reserve requirements and resuming its program of directly purchasing US Treasury bonds known as "quantative easing".
"In the modern era there are many ways to print money," Bernanke said "We are not limited to the physical printing presses. We have other tools at our disposal."
The head of the International Monetary Fund, former French finance minister Christine Lagarde also issued a statement which explained that while her organization is "concerned" about events in Fort Worth, the IMF believes that the long term economic growth of the United States rests not on creating money but on "balancing the federal government's finances, reforming the pension and health systems for long term fiscal sustainability, increasing labor market participation, and reducing barriers to trade and investment - including lowering the US's punishingly high rate of corporate tax."
In an interview with The Daily Currant a spokesperson for Bernanke dismissed Lagarde's prescription as "bullshit", claiming "We know what works here in America. Just press the button and the economy goes up. Works every time."
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