The Fed’s “Self-Financing” Is a Dangerous Illusion

With Trump’s latest attack on Fed Chairman Jerome Powell in the news, mainstream pundits have jumped to defend Powell from what is obviously an attempt to make the Fed less hawkish on inflation. In these defenses, however, an absurd myth is often advanced– that the Fed is somehow “self-financing.”

The following article was originally published by the Mises Institute. The opinions expressed do not necessarily reflect those of Peter Schiff or SchiffGold.

The estimated costs of the Fed’s building renovation project have risen from $1.9 billion to $2.5 billion. Hilariously, the Fed admits that one of the factors for the revised costs is “differences over time between original estimates and actual costs of materials, equipment, and labor.” Translation: “Looks like we’re not so good at forecasting and stabilizing future price inflation.”

At this point, extravagant government boondoggles are barely newsworthy. A few people batted their eyelashes last week at Trump’s proposal to expand military funding by half a trillion dollars but everyone has forgotten about it now because it was last week and attention spans are measured in seconds these days.