‘Barring unexpected bad economic news in the next several days, the Federal Reserve will finish its bond-buying program at the end of this month. In all, the program has pumped $3.5 trillion into the economy since 2008, helping to revive financial markets and stabilize the economy. Now comes the hard part.’

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Those are the words with which the New York Times begins its editorial “The Fed at the Crossroads.” We don’t know what “unexpected bad news” it foresees as possible; the biggest cloud on the horizon right now is the possibility that the Democrats will hold onto the Senate (our own theory is that the proximate cause of the Great Recession was Democrats’ accession in 2006 to the leadership of the House). The Times editorial, though, is a schematic of the current debate.

The “crossroads” to which the Gray Lady refers is the end of what it calls the Fed’s “bond-buying program.” This is quantitative easing, the program under which the central bank started scarfing up not only government debt but all sorts of financial assets from banks and other institutions. It did this because its near zero interest rates weren’t able to revive the economy in the face of the Obama administration’s socialist programs. Who, after all, would want to lend money at such rates?

Some $3.5 trillion is what the Times reckons the program has “pumped” into the economy since 2008. What it was pumped into was, in fact, not the economy but into Wall Street, where it has inflated stocks, bonds, and real estate. Where the Times says “pumped” what it really means is “created.” In any event, the liquidity is not what it once was. Its value — at 2.85 billion ounces of gold today — is but a fifth of the value of $3.5 trillion on the day President George W. Bush took the constitutional oath and a thirty-fifth of its value on the day in August 1971 on which America defaulted under the Bretton Woods Agreements.

When the Times writes of this helping to “revive” the financial markets, what it means is helping to “inflate” the financial markets. We may not be seeing a rise of the Consumer Price Index, but the stock market has ballooned like a bullfrog in a vacuum. When the Times writes that this has helped “stabilize” the economy, what it means is stabilizing unemployment at above 6% during the first six years of the Obama presidency.

As for the Times statement that “now comes the hard part,” what it means is the easy part. At least if one believes Ben Bernanke, who is the Fed chairman who launched this quantitative easing. “We could raise interest rates in 15 minutes if we have to,” he told CBS News’ “60 Minutes.” His 15 minutes of fame has come and gone, and he left the unwinding of his signature program to others.

The Times declares that this interest-rate-raising decision is the “next task” of the Fed. That’s in sharp contradistinction to the view of the new Fed chairman, Janet Yellow, who has made the next task of the Fed reducing unemployment. Lay that aside, though, and feature the Times’ assertion it is “appropriate” to raise interest rates when the economy shows “signs of overheating,” as “measured by inflation in wages and prices.”

Currently, the Gray Lady says, there are “no such signs,” given that the Fed’s “preferred annual inflation measure.” That’s an apparent reference to the Personal Consumption Expenditures Index, whose core version excludes seasonal food and fuel and, in any event, is controversial. The Times says it was, at 1.5%, “well below” the Fed’s 2% target for inflation. At 1.5%, the value of $100,000 would be halved in fewer than 50 years and at the Fed’s cherished 2% would be halved in 35 years.

The notion that inflation is as low as the Fed insists is disputed. It’s not our purpose here to sort out that dispute, merely to mark it. The former chairman of the House monetary affairs subcommittee, Ron Paul of Texas, has suggested that the actual inflation rate has been running at double-digits throughout this period. The Times complains that the bondholders and wealthy individuals want the Fed to raise interest rates sooner to pre-emptively attack inflation. The “wealthy” turn out to be the biggest beneficiary of quantitative easing.

This leads up to our favorite line in the Times in years. The job of the Fed, it says, “is to foster both stable inflation and full employment.” Stable inflation? From where did that language come? Not from the law. What the word “stable” describes in the Federal Reserve Act is “prices.” Stable prices mean no inflation. Stable inflation means inflation at a steady rate. That is not the law. And confusion on that head is, at bottom, the problem with the liberal world view of the Fed.