Imagine if a U.S. senator came forward with an idea for a third economic stimulus package. But unlike President Obama's first stimulus, which cost about $800 billion and included both tax cuts and transfer payments for the working poor and middle class, this stimulus would be given almost entirely to the rich. Worse, unlike Obama's second stimulus, which passed in December 2010 at a cost of about $900 billion and included tax cuts for working Americans and an extension of unemployment benefits, this new stimulus plan would be infinitely large. About $960 billion would be pumped into the economy in the first two years alone.

Sounds terrible right? No sane politician who ever had to face voters at the polls would ever vote for such a plan, right? Unfortunately, not only does this plan exist, but it is already being implemented by Federal Reserve Chairman Ben Bernanke. Two weeks ago, Bernanke announced that, due to the continued failure of Obama's economic policies to reduce unemployment, the Fed would begin buying $40 billion worth of mortgage-backed securities from Fannie Mae and Freddie Mac every month. And how long would these securities purchases last? "If the outlook for the labor market does not improve substantially, the committee will continue its purchases of agency mortgage-backed securities," the Fed said. In other words, the printing of money will continue until unemployment improves.

But will the Fed's new mortgage security purchases (more commonly referred to as "quantitative easing") do anything to reduce unemployment? History seems to suggest not. This is actually the third time the Fed has tried to stimulate economic activity by buying assets, thus adding more money to the economy. In 2009, the Fed spent $1.25 trillion buying mortgage-backed securities in "QE1", and in 2010, it spent another $600 billion buying U.S. Treasuries as part of "QE2." Yet despite all this money creation, the nation's unemployment rate has exceeded 8 percent for a record 43 consecutive months.

So if all this money is not going to job creation, where is it going? Straight to the same institutions that caused the financial crisis to begin with: the banks. "QE3" is supposed to help homeowners by lowering the interest rates they pay on mortgages. When the Fed buys securities from Fannie Mae and Freddie Mac, those agencies can then offer lower interest to banks like Wells Fargo and Bank of America that actually give mortgages to homeowners. But according to data compiled by Businessweek, the banks are not passing the savings onto mortgagors. Interest rates for home buyers are down but not nearly as far down as the rates the banks are paying. Therefore, the vast majority of the Fed's printed cash is going straight into the wallets of the banksters. "It's very good to be a mortgage originator right now," industry analyst Kevin Barker told Businessweek.

When Obama reappointed Bernanke in August of 2009, he called him a "out-of-the-box" thinker whose "bold, persistent experimentation" saved our financial system. But Paul Ryan has a different view. He has called Bernanke's Wall Street bailouts "sugar high economics" that may help "big banks and Wall Street but it doesn't help the rest of us." Ryan is dead on. And it is time for the experts in Washington to stop playing economic doctor and start letting the private economy heal.