We had no sooner finished our last post – on how last week’s US Congressional elections will make little difference to America’s underperforming economy – than our view was confirmed by the most authoritative source.

The US Federal Reserve has agreed to buy more federal government bonds – in effect allowing the government to print more money.

This decision has been strongly condemned by other countries. America, unable to deal with her own problems, is flooding the world markets with more cheap money. It is a selfish act.

Yet it may also be a necessary act. The real antidote to the lethargy of the US recovery would be for the federal government to take decisive political action to unleash the enormous latent power of American free enterprise – cutting taxes and regulation. However, the probability is that deadlock between the Democratic President and the Republican House of Representatives will prevent any such action.

That leaves the Federal Reserve as the only authority with the power to do anything, at least for the next two years.

So Federal Reserve Chairman Ben Bernanke is right to step in and try to fill the leadership vacuum. There is simply no one else who can do anything. Whether his first decision as the new undisputed Commander-in-Chief of the US economy is a wise one is, to put it politely, far more questionable.

Printing more money is a short-term solution that does nothing to address America’s longer term loss of competitiveness. Indeed, the superficial prosperity it is intended to produce might itself be dangerous, as it covers up America’s underlying problems and generates a false sense of security.

The greatest danger of all is that other countries will follow America’s example. After all, what is the point of virtuously balancing one’s own budget when someone else is benefitting from cheap money?

Businesses around the world – not just in America – are concerned about the continuing listlessness of the US economy.

This is one area where “Change” really is necessary. Yet Tuesday’s elections exposed how vacuous that word has become. It was Barack Obama’s slogan in 2008 – but this year it was the Republicans who were using it. Of course, what Mr Obama meant by “Change” and what the Republicans mean by the same word are two very different things, but what really matters to those of us who have to deal with the practical consequences is that major change of any sort is unlikely for the next two years.

Here are the hard facts. If the Republicans, who now control the House of Representatives, try to implement their idea of “Change”, it will be squashed by President Obama, who has power of veto, and by his Democratic allies who still control the Senate. If, on the other hand, Mr Obama still wants to push his own idea of “Change”, it is most unlikely to get through the Republican House.

It would be nice to think that this might encourage Mr Obama and the Republicans to work together for the common good. President Reagan was often able to charm Democratic Congressmen to vote his way in the 1980s, and President Clinton worked well with the Republicans on deficit reduction and welfare reform in the 1990s. However, there is little inter-party goodwill left in Washington these days. Whatever the rights and wrongs of the way Mr Obama rammed healthcare reform through Congress, it left him with no friends on the Republican side.

The irony is that all this might help Mr Obama. President Clinton faced a similar situation in 1994: after a disastrous start to his Administration, he lost control of Congress to the Republicans – and thereby saved his Presidency. A hostile Congress forced him to the political centre – where his Administration became more successful – while simultaneously giving him someone to blame. His party’s defeat in 1994 led directly to his own re-election in 1996.

Tuesday’s result has therefore made Mr Obama’s re-election more likely in 2012. However, unless he comes to a second term with a new economic agenda, real “Change” will be delayed for another four years. In the meantime, America’s enterprise culture will probably deliver a degree of recovery – in spite of the government rather than because of it: at least the squabbling among the politicians will mean they will have less chance to make things worse. However, all that time America will be losing her competitiveness, and the shift of global economic power across the Pacific will continue.