West Tennessee Congressman Tells Fed Chair Government Is Too Big A Player In US Economy

Rep. Stephen Fincher says the Federal Reserve’s intervention in the economy goes beyond its original mission. Image: Talk Radio News Service/Flickr

Republican Congressman Stephen Fincher of West Tennessee says the federal government is still playing too large a role in the US economy. He brought up that point yesterday, as Federal Reserve Chairman Ben Bernanke testified before a congressional committee.

Fincher says he’s concerned about the amount of money the government has pumped into the economy since 2008. He says private business has come to depend on government intervention, and will react negatively once the Fed starts to pull back.

“And when we ever shut that off, there’s going to be a reaction,” Fincher said during yesterday’s hearing.  “The reaction is how that the stock market is 15,000  if we drop back to 12,000 again you’re going to see a panic.”

The Fed Chairman answered by saying the economy remains weak. Bernanke says action is needed to make sure the US doesn’t slide back into recession.

“We have to do something; we have to have interest rates somewhere,” he said. “The Fed does control our money supply, so we have to do something. And I think we’re better off trying to get the economy moving than not.”

Bernanke also defended the independence of the Federal Reserve, when Fincher asked if the Fed was growing too close to the Treasury Department and the White House. Bernanke says the three had to work together to fashion the 2008 bank bailout.