WAPO Should Make Clear, Constraints on Monetary and Fiscal Policy Are Political

A front page Washington Post piece was headlined, "Geithner, Bernanke Have Little in Arsenal to Fight New Crisis." This piece should have made it clear to readers that the obstacles to additional action are political not economic. All the obstacles noted in the piece are political in nature. The one possible exception is the S&P downgrade of U.S. government debt, which does not appear to be an obstacle at all. The markets laughed off this downgrade, sending U.S. bond prices soaring on the...