The New RINO

It's a RINO all right.

No, we don't mean the taunt used by conservatives for Republicans who don't toe the far right's line.

We're talking about a different kind of RINO — a Recovery in Name Only.

While the recession officially ended in June 2009, it would be hard to persuade the millions of out-of-work Americans of that fact. Despite official economic growth over the past 16 months, jobs remain very hard to come by.

Officially, the U.S. unemployment rate in September was 9.6 percent; when those who have given up looking for work or who are working part time but want to work full time are included, that number rises to 17.1 percent

The nation's central bankers remain worried. A majority of central bank officials now appear to be leaning toward additional stimulus to juice the economy, according to the minutes of their latest policy meeting, released Tuesday. The most likely action would be something known in Fed parlance as "quantitative easing," in which the Fed buys government debt.

It's the best shot the Fed has to stimulate growth, and, we hope, job creation.

The central bank lowered short-term interest rates to near zero in December 2008 and then bought $1.7 trillion of mortgage-backed debt and Treasuries in an attempt to reduce long-term interest rates.

But a persistently high unemployment rate and almost zero inflation give the central bank an opening. The bankers may essentially create money to buy long-term debt, which would put even more pressure on long-term rates.

The move might make sense, but there is always a risk that inflation will reappear as the economy begins to grow again. The trick will be determining just when to take the foot off the gas pedal. And there is a risk of feeding the deficit. Printing more money just makes it easier for the government to spend it.

Recoveries in the wake of downturns triggered by financial crises have historically been sluggish. We've favored additional stimulus in an attempt to ease the pain. But we're also cognizant of concerns over the nation's spiraling debt. In the short term, the Fed should keep trying to stimulate growth.

But the central bank also must be prepared to hit the brakes when conditions call for it.

REPRINTED FROM THE MILWAUKEE JOURNAL SENTINEL.

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