DeepSummary
Steve Forbes criticizes the Federal Reserve and the Treasury Department for hurting small businesses through their massive short-term borrowing. He argues that this borrowing sucks up resources that would normally be available for productive lending to small businesses. Forbes believes the Fed's policy of suppressing interest rates to stimulate the economy has failed, leading to stagnation instead.
Forbes explains that the Fed has bloated its holdings of securities, especially long-term bonds and mortgages, to keep interest rates low. However, this has led to the government piling on debt, leaving the economy poorer. He suggests that the government should scale back short-term borrowing and issue more long-term bonds to free up capital for small business lending.
Forbes also criticizes the Fed's approach to fighting inflation by depressing the economy, calling it "destructive nonsense." He argues that a vibrant small business sector has been a unique strength of the US economy and an engine of upward mobility, but it is now facing challenges due to a lack of capital and regulations.
Key Episodes Takeaways
- The Federal Reserve and Treasury Department's massive short-term borrowing is taking away resources that could be used for lending to small businesses.
- The Fed's policy of suppressing interest rates to stimulate the economy has failed and led to stagnation instead.
- Government debt continues to pile up as a result of low interest rates, leaving the economy poorer.
- Small businesses are a crucial engine of economic growth and upward mobility in the US, but are facing challenges due to lack of capital and regulations.
- The government should scale back short-term borrowing and issue more long-term bonds to free up capital for small business lending.
- The Fed's approach of trying to fight inflation by depressing the economy is considered "destructive nonsense" by Forbes.
- Years of crushing regulations have made it harder for small businesses to access capital from banks.
- The lack of capital and access to lending is a major roadblock for small businesses looking to expand.
Top Episodes Quotes
- “Both the Fed and Uncle Sam have become gargantuan short term borrowers. They are sucking up resources that would normally be available for productive use by the private sector, especially small businesses.“ by Steve Forbes
- “The Fed and other central banks binged on buying long term bonds with the express purpose of suppressing interest rates, which sank to levels never seen before in human history. We even had the spectacle of negative interest rates.“ by Steve Forbes
- “A vibrant small business sector has long been a unique strength of the US economy. It has been an engine of upward mobility.“ by Steve Forbes
- “Of course, our central bank continues to harm everyone with its unquestioning, cult like allegiance to the creed that you fight inflation by depressing the economy. Its destructive nonsense, but the Fed still does it.“ by Steve Forbes
- “What our government should be doing is scaling back at short term borrowings and issuing more long term bonds. This would free up additional money for productive lending to smaller businesses.“ by Steve Forbes
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Episode Information
Steve Forbes: What's Ahead
Forbes
5/7/24
Steve Forbes explains how both the Federal Reserve and President Biden's Treasury Department are doing great, continual harm to small business—and why their blocking of this most important engine of national growth only further endangers the economic stability.
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