Editorial: Federal Reserve's new move is better than nothing

The Federal Reserve will turn on the printing press again, and not a moment too soon.

Of course, the nation’s central bank isn’t actually printing money, but it will create it all the same — electronically — as part of its third program of “quantitative easing.”

QE3, as it’s known, will involve creating money to buy mortgage bonds, which should help the housing market by making home loans cheaper. QE3 is also likely to drive down the dollar (increasing the supply has that effect), which should make U.S. exports cheaper. This may in turn stimulate hiring.

Also important was the Fed’s statement that it will likely keep interest rates near zero until at least mid-2015, which should prod some investors now on the sidelines to put their money to work in riskier ways, such as in expanding a business or erecting new buildings. That could create jobs too.

The Fed’s action won’t be a huge help; a government stimulus program would be more effective, and fairer too, since keeping interest rates artificially low, as the Fed is doing, is like a tax on savings. Rates so low penalize thrift and deprive retirees of the risk-free interest many had counted on. It could also inflate a new stock market bubble.

But the political climate makes a big government infrastructure program or other such stimulus impossible. Given unemployment above 8 percent, falling median income, and the plight of many who owe more on their home than the place is worth, Fed action beats no action.