The American Spectator

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Race To Zero

By Philip Klein on 12.16.08 @ 2:35PM

The Federal Reserve has determined that in the midst of an economic crisis caused by an easy money environment, the best course of action is to lower interest rates below what they were at the height of the bubble, and has now set a target range of 0-.25% for the fed funds rate.

Its thinking, according to the Federal Open Market Committee statement:

Since the Committee's last meeting, labor market conditions have deteriorated, and the available data indicate that consumer spending, business investment, and industrial production have declined. Financial markets remain quite strained and credit conditions tight. Overall, the outlook for economic activity has weakened further.

Meanwhile, inflationary pressures have diminished appreciably. In light of the declines in the prices of energy and other commodities and the weaker prospects for economic activity, the Committee expects inflation to moderate further in coming quarters.

The Federal Reserve will employ all available tools to promote the resumption of sustainable economic growth and to preserve price stability. In particular, the Committee anticipates that weak economic conditions are likely to warrant exceptionally low levels of the federal funds rate for some time.

So in other words, buy now, pay later.