It seems the Federal Reserve's latest proposed move to stimulate the economy and reduce unemployment isn't that popular with the GOP. On Wednesday, the party's leadership sent a letter to Federal Reserve Chair Ben Bernanke expressing concern that the plan to purchase an additional $600 billion worth of U.S. Treasury bonds might produce “hard-to-control, long-term inflation.” Nothing in the available economic data, however, even hints at an uptick in inflation.

As Nobel laureate economist Paul Krugman noted today, though the Fed usually purchases short-term debt from the open market when it engages in monetary policy, interest rates on that debt are as low as they can go, so the central bank is buying longer-term debt. But the effort, dubbed "quantitative easing 2" (QE2), is, as Bernanke recently pointed out, "just monetary policy."

Moreover, fears about "hard-to-control, long-term inflation" just don't bear out. Earlier this week, the Bureau of Labor Statistics reported that core inflation for the year, which excludes food and energy prices, was 0.6 percent. This “is the smallest 12-month increase in the history of the index, which dates to 1957.”

The Federal Reserve Bank of Cleveland also released estimates of inflation expectations on Wednesday that paint a similar economic picture. The bank's "latest estimate of 10-year expected inflation is 1.50 percent," which means "the public currently expects the inflation rate to be less than 2 percent on average over the next decade."

Thus, the letter sent by the Republican leadership protesting the Fed's effort doesn't really make sense. As Krugman points out, the letter fails to mention why the public "should fear inflation when the reality is that inflation keeps hitting record lows," and there's no evidence to suggest a change anytime soon.

Maybe conservative leaders on Capitol Hill should take some time to research these issues before they go complaining about the federal government utilizing one of its last resources to improve the economy. I'd like to suggest a delightful little pamphlet titled, "The Story of the Federal Reserve System." It's in comic-book form, so it should aid comprehension.

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