While Barack Obama talks of ramping up “investments” to stimulate growth, the chair of the Fed agrees with the House GOP’s economic-policy leader Paul Ryan on how best to generate sustainable growth in the American economy.   Questioning Ben Bernanke on Capitol Hill today, Ryan asked a direct question to summarize Bernanke’s testimony, and got a direct answer (via Andrew Stiles at The Corner):

Ryan: “Just to summarize, you do believe that one of the best things we can do for short-term economic growth is to put out a plan that actually stabilizes our fiscal picture, that actually gets our liabilities under control, and shows, with confidence, that we have the right trajectory because we’ve addressed the programs — which are spending programs — that are getting us out of control. Is that the case?”

Bernanke: “That’s correct.”

On another Fed policy, however, Ryan and Bernanke appeared farther apart:

“There is nothing more insidious that a country can do to its citizens than debase its currency,” Ryan told Bernanke. “Chairman Bernanke: We know you know this. We know that you’re focused and concerned about this. The Fed’s exit strategy and future policy – it will determine how this ends.”

Ryan said he believed a “course correction here in Washington is sorely needed.”

“Endless borrowing is not a strategy,” he said. “My concern is that the costs of the Fed’s current monetary policy – the money creation and massive balance sheet expansion – will come to outweigh the perceived short-term benefits.”

Bernanke had earlier defended the QE2 strategy:

“By easing conditions in credit and financial markets, these actions encourage spending by households and businesses,” Bernanke said. “A wide range of market indicators suggest that the Federal Reserve’s securities purchases have been effective at easing financial conditions, lending credence to the view that these actions are providing significant support to job creation and economic growth.”

The quantitative easing strategy was forced on the Fed out of necessity, thanks to an out-of-control federal deficit and no appetite in Washington at that time for structural budget changes to eliminate deficit spending.  Bernanke had no options left but QE2 or to stand by while the economy ground to stagnation.  The Fed won’t be able to go much further than they have now — the Daily Caller reports that one Fed official, Dallas Fed president Richard Fisher, raised a public warning against going any further.

Bernanke needs Congress to act to pare spending back significantly in order to strengthen the American position on bonds and currency.  He’s out of options — which is why Bernanke was so agreeable with Ryan today.