BERNANKE: CONSUMER LOAN PROGRAM STILL NEEDED

Federal Reserve Chairman Ben Bernanke said Friday a government program intended to spark lending to consumers and businesses is still necessary even with other emergency lending programs winding down as the economy recovers. “An ongoing need still clearly exists” for the program, which also is aimed at making sure loans flow to the troubled commercial real estate market, Bernanke said in brief remarks to a conference here sponsored by the Congressional Black Caucus Foundation.

Under the program, which got off to a slow start in March, the Fed provides loans to investors. They use the money to buy newly issued securities backed by auto and student loans, credit cards, business equipment, commercial real estate and loans guaranteed by the Small Business Administration. Still, Bernanke said the program is responsible for indirectly financing nearly 3 million loans to households — excluding credit cards — and nearly 400,000 loans to small business.

Uh…isn’t creating more money to lend to people in order to buy these big ticket items what got us into our current economic mess to begin with?