Fisher (right) lays out the case against quantitative easing in a speech Monday, arguing not for the first time that the economy looks weak – but that further Fed easing carries bigger risks than benefits. 

“I asked that the FOMC consider that we might be prescribing the wrong medicine for the ailment from which our economy is suffering,” Fisher said in a speech before the Association for Financial Professionals in San Antonio. He continues:

The essence of what I reported to my colleagues when we met last week is that more things are moving in the right direction than in the wrong direction. There are some green shoots beginning to emerge in a landscape still pocked-marked by brown spots. General economic conditions are improving slightly and are expected to continue doing so. The risk of a double dip in economic activity has lessened, as has the risk of deflation. Financial speculation and excess, however, is beginning to raise its hoary head. 

Fisher also notes that the Fed is positioning itself as the buyer of pretty much all government debt to be issued in the coming months, to its peril.

One cost is the risk of being perceived as embarking on the slippery slope of debt monetization. We know that once a central bank is perceived as targeting government debt yields at a time of persistent budget deficits, concern about debt monetization quickly arises. 

That brings him to a pair of contrasting cases.

I realized that two other central banks were engaging in quantitative easing—the Bank of Japan and, most notably, our friends at the Bank of England. But the Bank of England is offsetting an announced fiscal policy tightening that out-Thatchers Thatcher. This is not the case here. Here we suffer from fiscal incontinence and regulatory misfeasance. If this were to change, I might advocate for accommodation. But that is not yet happening. 

From my perspective, there are two ways your central bank can approach them: the way it is being done by the Bank of England, which appears to me to be seeking to cushion the adjustment to a policy of fiscal abstinence by a new government after a prolonged period of fiscal debauchery; or to provide the space necessary for our newly elected Congress to work with the president to find a way to restore fiscal sobriety without choking off economic recovery.

Sobriety, debauchery, incontinence: so many metaphors. And yet in the end, it comes down to what our elected leaders are and are not willing to do, Fisher notes, very much in concert with recent comments on behalf of Fed chief Ben Bernanke.

Here is the message: The Fed is going out of its way to be a good citizen. It is time for the Congress to do the same.

True enough, but don’t go holding your breath on that one.