Bernanke repeatedly plunges headlong into fiscal policy, hoping to place the blame for the next collapse on anyone other than the Fed. The fact that Bernake is looking for scapegoats is worrisome. The collapse may be coming, or they just don't know what will happen and are hedging their bets. Whatever is going on Chairman Bernanke warned on Thursday that overzealous cuts to government spending in the short term could derail a shaky recovery and said a debt default could wreak financial havoc.
Federal Reserve Chairman Ben Bernanke warned on Thursday that overzealous cuts to government spending in the short term could derail a shaky recovery and said a debt default could wreak financial havoc.
"I only ask ... as Congress looks at the timing and composition of its changes to the budget, that it does take into account that in the very near term the recovery is still rather fragile, and that sharp and excessive cuts in the very short term would be potentially damaging to that recovery," Bernanke told the Senate Banking Committee.
On the second day of delivering the Fed's semiannual monetary policy report to Congress, Bernanke renewed his warning that a United States debt default would be devastating for the U.S. and global economies.
"It would be a calamitous outcome," Bernanke said. "It would create a very severe financial shock that would have effects not only on the U.S. economy, but the global economy."
Failure to raise the debt limit in time would constitute a "self-inflicted wound" to the economy, he added.
Did you get that ? Cuts to federal spending could wreak havoc in the economy. The tag team of Obama and Bernake have wreaked more havoc in 2 1/2 years then we have seen since the Great Depression. For Bernake to try an blame the Congress for insisting on spending cuts for this hamster wheel failed economy, is not only a joke, it's irresponsible political pandering, and the reason why why are in the mess in the first place. We have NO leadership.
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