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Fed Should Do Less, Not More, to Avert Another Calamity

Financial markets will collapse, again!

This calamity will be worse than the last, because much of the middle class's residual wealth -- retirement and savings accounts and other assets -- will be dissipated and federal spending will be contracting not expanding.

By late spring, the Congress and president will likely raise taxes or cut spending without addressing the fundamental structural problems bedeviling the economy.

That could easily instigate another recession, and the Fed will be pressured to enable more Congressional procrastination on structural issues, and President Obama will set his sights on replacing Ben Bernanke with an even more compliant Fed chairman.

It might be better to take a second recession now than face the kind of calamity in real estate and financial markets that is brewing, and for the Fed to resist calls to do more.

That would require a lot of courage from Ben Bernanke. If he doesn't try to avert another immediate recession the President and Congress seem bent on instigating, he will be vilified.

Yet, sooner rather than later, Mr. Bernanke must speak truth to facts, or leave his successor an even bigger pending crisis than he managed.

This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.