From Mises Institute, really making money

Political Power and Economic Ignorance by Jeremie T.A. Rostan

COMMENTS ON BUSHS SPEECH it managed to explain the pending recession of the US economy by a previous situation of "easy credit" without mentioning the monstrously inflationist policy of the Federal Reserve — which reached its climax in 2003 and 2004, when it lent dollars at a negative short-term interest rate, and resulted in the creation of more dollars in a seven-year period (2000–2007) than had been created cumulatively in the two centuries since the founding of the United States. ….

Nevertheless, if some grasped the connection between these present effects and that past cause, few of them seem to have grasped that resorting to the same policies at present will necessarily have the same consequences in the future: to delay the recession, and worsen it…..


….The following is number 7 of a series of "macroeconomics" multiple choice questions:[3]

To counteract a recession, the Federal Reserve should
raise the reserve requirement and the discount rate
sell securities on the open market and raise the discount rate
sell securities on the open market and lower the discount rate
buy securities on the open market and raise the discount rate
buy securities on the open market and lower the discount rate

And the answer is supposedly E.

Notice that the question is not, "Should the Federal Reserve do anything, and if so, what?"

No, the question assumes that the Federal Reserve should do something.

What this question really asks is, what intervention of the Fed will have the immediate effect of stopping a recession? It does not ask, what are the causes of recessions? It does not ask, what will be the long-term effects of the Fed's actions?….. WHOLE STORY