Today's Number Is $4 Trillion

U.S. House Speaker John Boehner and President Barack Obama golf at Andrews Air Force Base in Maryland Photograph by Mandel Ngan/AFP via Getty Images

If I was able to ask Ben Bernanke a question at today’s press conference, I would ask this: What in your models make you believe that GDP growth can accelerate to a range of 2.3%-3% in 2013, 3%-3.5% in 2014 and 3%-3.7% in 2015 from 1.7%-1.8% in 2012 but somehow forecast that PCE inflation will be no greater than 2% in each of those years vs 1.6%-1.7% in 2012?

— Peter Boockvar, Miller Tabak + Co., What I Would Ask Bernanke…, Dec. 12, 2012.

I have the clearest recollection.

In the vicinity of late-August 2007, on separate days, at separate moments, two eminent economists said exactly the same thing to me.

“This will cost $4 trillion.”

“This” is what we have wrought. A crisis of unspeakable duration with social costs and news-making amplitudes that test any and all but those of the 1930s.

William Poole and Kenneth Rogoff are first-rate minds with inclusive brilliance and marginal disagreement. They chose to agree, in the first at-bat of this crisis over the “cost.”

We are 5 years, 4 months on, and finally our, and the world’s, Central Bank expand their non-dithering assistance.

This as Fiscal-Cliffed Washington and collective Europe burn.

My colleague Michael McKee suggests a larger Fed balance sheet will arrive soonest. Peter Boockvar suggests there will be a price to pay.

I would suggest the gravity of the moment is profound as our politicians dither and the Chairman considers their certain irresponsibilities. He must employ action as America’s hysteresis (pdf) entrenches in too many trenches of individual depression.

It is incalculable, the importance of today’s Federal Reserve action.

Today’s number is $4 trillion. Discuss.

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