From Ben Bernanke, in testimony before Congress today:
The recovery is close to faltering.
It’s good to see that someone is noticing. In Bernanke’s prepared remarks, after noting tight credit, slow consumer spending, financial stress in Europe, and other problems likely to hurt the economy, he got to this:
Another factor likely to weigh on the U.S. recovery is the increasing drag being exerted by the government sector. Notably, state and local governments continue to tighten their belts by cutting spending and employment in the face of ongoing budgetary pressures, while the future course of federal fiscal policies remains quite uncertain….In setting tax and spending policies for now and the future, policymakers should consider at least four key objectives. One crucial objective is to achieve long-run fiscal sustainability….A second important objective is to avoid fiscal actions that could impede the ongoing economic recovery.
This isn’t really new. But every time Bernanke says it, he edges slightly closer to calling GOP members of Congress idiots for obsessing about short-term austerity and spending cuts when they should be obsessing over how fast they can shovel money out the door. What’s more, he’s being as clear as he can that if Congress does this, the Fed’s monetary policy won’t get in the way.
But poor old conservative Ben Bernanke is now, in the view of most current Republicans, a dangerous radical lefty hellbent on debasing the currency and getting his Kenyan pal in the White House reelected. I wonder if he ever sees any humor in this?