Seeds of Destruction: Why the Path to Economic Ruin Runs Through Washington, and How to Reclaim American Prosperity

Part II. Fixing America’s Destructive Duo: Monetary and Fiscal Policy

What role did the Federal Reserve play in creating the housing bubble that led to the 2007–2009 financial crisis? What kind of leadership do we need at the Federal Reserve to ensure long-term growth? And can we really fiscally stimulate our way out of a decade of economic stagnation and zero wage growth? The next two chapters address these critical questions.

The monetary policy analysis in Chapter 3, “Why an Easy-Money Street Is a Dead End,” makes it abundantly clear that the Federal Reserve, under the leadership of first Alan Greenspan and then Ben Bernanke, did indeed play a key role in inflating the housing bubble by keeping interest rates artificially low for far too ...