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Tuesday, September 27, 2016

The stock market is testing new highs, the unemployment rate is declining and consumer confidence is at a six-year peak, but the Federal Reserve chairman Ben Bernanke wants Congress to know that things could be a lot better.

Testifying Wednesday in front of the Joint Economic Committee of Congress, Bernake pointed out that the economy has been improving, but one obstacle is keeping a real recovery from sparking — them:

“Most recently, the strengthening economy has improved the budgetary outlooks of most state and local governments, leading them to reduce their pace of fiscal tightening. At the same time, though, fiscal policy at the federal level has become significantly more restrictive. In particular, the expiration of the payroll tax cut, the enactment of tax increases, the effects of the budget caps on discretionary spending, the onset of the sequestration, and the declines in defense spending for overseas military operations are expected, collectively, to exert a substantial drag on the economy this year.”

President Obama was able to delay serious austerity — tax increases paired with budget cuts — from coming into effect until this year. This delay has given housing a chance to recover, as evidenced by strong recent earnings from The Home Depot.

However, there’s no doubt that the payroll tax holiday, which Republicans never considered extending, is affecting every America who lives paycheck to paycheck. The sequester will take $85 billion and 750,000 jobs out of the economy this year. Even the ending of the Bush tax cuts on income over $400,000 will take some steam out of the economy, though tax breaks for the rich have the least stimulative benefit for the economy.

Bernanke points out that the biggest problem with the sequester is that it has no real effect on the actual problem this country faces — the long-term deficit.

“Although near-term fiscal restraint has increased, much less has been done to address the federal government’s longer-term fiscal imbalances,” he said. “Indeed, the [Congressional Budget Office] projects that, under current policies, the federal deficit and debt as a percentage of GDP will begin rising again in the latter part of this decade and move sharply upward thereafter.”

Basically, Bernanke is echoing what New York Times‘ columnist Paul Krugman has been saying for years: Get the economy going, then worry about long-term fixes.

AP Photo/Manuel Balce Ceneta 

  • Things could, and should, have been a lot better by now had it not been for all the obstructionism and lack of vision by those who priority is political gain rather than what is best for the country.
    I think it is important to remember that the impact of investment goes well beyond economic and employment considerations which are, obviously, critical to most of us. We must invest in education, R&D, and modernization to meet the challenges that are children and grandchildren are bound to face 20 or 30 years from now, and change the decline that is evident and that compromises the hegemony we have enjoyed on the global economy until now. Austerity is not the answer, particularly when it is limited to our quality of life, while truly unnecessary projects remain untouched.
    We have to stop focusing on next year’s budget and work towards where we want to be two or three decades from now. Contrary to what some people want us to think, we are a very wealthy country, and GNP and GDP are second to none, and if we can afford to blow hundreds of billions of dollars in ridiculous and unnecessary crusades, we definitely have enough money to invest where we should – at home.

    • TZToronto

      One has to wonder what the reason for obstructionism is. If obstruction exists for political gain, then why are Republicans doing seemingly everything they can to keep people from voting for them? Oh, some will still vote for Republicans because . . . well, that’s what they do–and they hate Democrats and liberals. Smart Republicans (it’s not an oxymoron in many cases) will see obstructionism for what it is–an attempt to undermine the economy so that Democrats will have to take the blame. (How else can one explain Republicans voting against their own bill as soon a President Obama and the Democrats make noises about approving it?) The problem is that Republicans have been too successful in getting elected to the House, so obstructionism must fall on those who are doing the obstructing–House Republicans. So the purpose of obstructionism must be something else. I think it is nothing more or less than Big Money (and I don’t mean that guy in the Progressive Insurance commercials) trying to subvert the federal government, to remove all restrictions on their lives and their ability to exercise de facto rule, to remove the People from We, the People, and to truly establish an oligarchy.

      • kanawah

        The obstruction is two fold.
        One, the Transylvania tea bags are mostly racist, and they cannot stand the fact that the American people elected a black man president.
        Two, they want to destroy Obama at any cost, even if it causes another recession.

        • TZToronto

          Now you’ve done it. You’ve mentioned the elephant in the room. I don’t disagree one bit. However, I still want to know the motivation behind their desire to throw out the baby with the bath. They must be really ticked off to want to plunge the country into a new recession–or a depression–just to get rid of someone they hate. Could it be that President Obama and the Democrats stand in the way of a takeover of the USA by extreme right-wing demagogues, and the only way to effect this takeover, in their warped view of how the U.S. political system works, is to keep the government from functioning? I truly hope that the Tea Party decides that real Republicans are just too far left for their liking and that they’ll run their own slate of hateful candidates. With the wingnut faction draining votes from Republican House candidates, the Democrats have a chance to control Congress for a while.

          • Garry Owen Ault

            Was it not the GOP that hailed the idea of restricting money for operation of the Federal Government so it ….could be drowned in a bathtub. Cannot forget Norquist being a Registered GOP type.

      • I doubt the folks that vote Republican do so because they approve of obstructionism or policies that stifle our ability to improve our standard of living. The reason is extreme ideology, ranging from the belief that government is the reason for all our problems to prejudices that should no longer be a consideration when we decide who to vote for.

        • TZToronto

          I think you may be giving them too much intellectual credit. I think they just want to hand over the government to big business. Big business knows what’s best for all Americans. After all, this is a capitalist country. It says so in the Constitution . . . no, wait. That’s not correct. Right. It’s a Christian country . . . no, wait. that’s not right either. Oh darn.

          • jointerjohn

            Some of them and their big money supporters want to bring American workers to their knees. Make it hurt so bad they will be willing to abolish minimum wage and other worker protections in order to avoid starvation. The American right wing has spent now thirty-two years trying to turn us into another Mexico, another Brazil, and that is the last piece of the puzzle.

      • Michael Kollmorgen

        Read two very good books

        The Future by Al Gore
        and
        Shock Doctrine by Namomi Kline

        It’s all corporate manipulation of the government. And, their goal is total control of our economy and the world’s economy without government intervention.

        Eventually, they, Corporations, want a one world government, controlled exclusively by them.

        So far it seems to be working……………..

        • TZToronto

          Perhaps I’ll find the answer to the ultimate question in the two books. And what is the ultimate question? Why? Perhaps THE CORPORATION wants Earth to be the best place in the solar system to live. Well duh, even with carbon credits and high taxes on the rich, Earth would still be the best place to live. We’re already Number One!! So what do they really want?

          • Michael Kollmorgen

            The Ultimate answer – they want absolute Control. This will give them absolute Power to do whatever they want.

            The Elites will love it and Soylent Green will be a real possibility………………..

            But, the guy on the street, he’ll be nothing more than a under-paid, under-educated economic slave and eating green little squares for dinner. We already are to a certain extreme. Wage Levels in the US alone has been forced back 20 years to 1990s level and our educational system is going to pot just as fast and our food sources are starting to be questionable.

            The Tip Off for this happening, which the public should be in a uproar over, was when our Supreme Court gave Corporations Human Rights.

            You see, Corporations have no loyalty to any single country. While their bleeding a country like ours for instance of our resources, they’re looking at another country to do the same thing over again. The process keeps repeating itself.

            Since our country is in the dumps, have you noticed, China, Brazil and India are starting to be economic power houses? It’s all manipulation.

          • Garry Owen Ault

            Soylent Green has been replaced by “The Hunger Games” and we were all told that was just Fiction.

          • Michael Kollmorgen

            With all situations such as Fiction, Myth, Rumors, whatnot, there is always some of it based on facts.

            The movie Soylent Green, was a prediction of what could happen in the future. This was based on scientific theory IF we didn’t stop polluting our environment and just let the Corporation have total control with no government controls.

            I’ve heard of the Hunger Games, but I haven’t had the chance to read up on it yet.

            Have a nice day……….

        • But There’s Smart People Like Us Would Will Fight With Our Last Breath To Keep This From Happening!!! This Is Where We Will Stand Our Ground!!!!!!!!!

          • Michael Kollmorgen

            I hope your right……….

      • Sand_Cat

        They figure with all their voter restriction laws they can keep more people from voting for Democrats than they alienate with their policies.

    • You Got That Right My Friend It’ Seem To Me They Are Doing Everything They Can To Run The Clock Down Just To Make Our President Look Bad!! Only Problem Is We Are The Witness To All The Dirty Tricks, Lying, Witch Hunting, Hearing That Is Wasting Millions Of Our Tax Paying Dollars, Just To Keep From Doing Their Jobs, While Destroying Barack Obama Presidency Cause He’s Our First Black President!!! 🙁

      • Michael Kollmorgen

        You have to wonder what the Mindset is of nearly half of the voting public who voted these bastards in, in the first place.

        I blame the Public more than I blame these politicians. I guess it boils down to – you get what you vote for. And, due to people’s stupidity, they deserve what they got to the MAX.

        The Main Problem is that the damage they’ve done is going to take many years to repair, IF it can be done. Remember too, these laws and policies are really easy to enact.

        Trying to get them off the books and repair the damage is an entirely different matter.

  • I am sick of our governments BS. It is time for people to a stand. The least me need to do is not vote for any incumbent. If they have proven their worth to us then yes, keep them.

    • kanawah

      Neva, half right. Do not vote for any incumbent REPUBLICON, or Transylvania tea bag.

  • Lynda Groom

    Congress has done virtually nothing on the economic front for the simple reason that few, if any, of them understand the basics of economy theory. They stalled, changed the subject and obstructed for the entire first term of the President hoping that the economy would self-correct so they would not be exposed as illiterate clowns. Well they’ve been exposed and the economy has made some strides toward recovery. The Fed Chair called them out today, but don’t expect any of them to admit their failures. It is much easier to point the finger at Obama and blame him for their own inaction. What a clever bunch of part time employees we’ve got there.

    • kanawah

      The right ,one, does not under stand economics, and two, they want to destroy Obama, even if it destroys the country.

      Also, they are kissing their rich contributors collective ass.

    • DurdyDawg

      Part-Time…… WITH BENEFITS FOR LIFE!! Take away their ‘entitlements’ and see how many of them choose to run for re-election. Laugh clowns, laugh (but only so long as it benefits them).

  • nana4gj

    If there is anything we are learning it is that there are some institutions almost as dysfunctional as the Republican Party and their Congressional members. The Military’s system of Justice is not Just; the IRS is clumsy; the national press is irresponsible and self serving; the banks are greedy; and it’s no wonder the Republicans can get away with what they do.

    I am convinced this President was really not a politician when he ran for office and was elected. I think, deep down, we sensed that and it was part of his attraction. He really believed he could make things better if he just did the best job and tried to work with all involved, believing, perhaps naively, that since our country was in dire straits, everyone, including that “loyal opposition party” would want and need to make corrections and solve the problems we were facing. Of course, they all had other ideas, other motives. Which is why he finds himself more comfortable traveling around to be with the people who seem to be the only ones interested in getting things done for the right reasons.

    He never anticipated having to dangle his feet constantly into a vast open pit of snapping crocodiles.

    Oh, and, by the way, it IS all their fault.

    • kanawah

      The reason Obama has not “make things better” is the republiCONS and the Transylvania tea bags have blocked virtually everything he has tried to do.

      • nana4gj

        Exactly. We did not elect another dirty politician when we elected Obama. We elected a man who wanted to get work done and, believe me, there was plenty of work to get done, more he discovered when he walked into that Oval Office. In light of all of the pressing needs he and we faced as a nation, the indictment of the Republicans is even more consequential. IT IS ALL THEIR FAULT. Now, they are in Phase II, the Syndrome of Republicans In Action During the Second Term Of All Democrat Presidents. We still get nothing done. I’m waiting for the next scandal that reveals he sleeps with his socks on, OMG. That will be the end.

        • Very Well Said Indeed!! And Yes The GOP/Tea Party Can Take Credit For Gutting Out Their Own Country And Sellout Their Own People Just To Make A Buck!! 🙁

    • Archie’s Boy

      Well said, Nana! A perfect storm: a politically naïve and personally timid (yet well-intentioned) president set against a congress paralyzed by lunatic Republican ideologues.

  • Now we have this just after Dr. Bernanke said were going too fast and he is right . The stock market is testing new highs, the unemployment rate is declining and consumer confidence is at a six-year peak, but the Federal Reserve chairman Ben Bernanke wants Congress to know that things could be a lot better.

    Testifying Wednesday in front of the Joint Economic Committee of Congress, Bernake pointed out that the economy has been improving, but one obstacle is keeping a real recovery from sparking — them:

    “Most recently, the strengthening economy has improved the budgetary outlooks of most state and local governments, leading them to reduce their pace of fiscal tightening. At the same time, though,fiscal policy at the federal level has become significantly more restrictive. In particular, the expiration of the payroll tax cut, the enactment of tax increases, the effects of the budget caps on discretionary spending, the onset of the sequestration, and the declines in defense spending for overseas military operations are expected, collectively, to exert a substantial drag on the economy this year.”

    President Obama was able to delay serious austerity — tax increases paired with budget cuts — from coming into effect until this year. This delay has given housing a chance to recover, as evidenced by strong recent earnings from The Home Depot.

    However, there’s no doubt that the payroll tax holiday, which Republicans never considered extending, is affecting every America who lives paycheck to paycheck. The sequester will take $85 billion and 750,000 jobs out of the economy this year. Even the ending of the Bush tax cuts on income over $400,000 will take some steam out of the economy, though tax breaks for the rich have the least stimulative benefit for the economy.

    Bernanke points out that the biggest problem with the sequester is that it has no real effect on the actual problem this country faces — the long-term deficit. I thank you Firozali A.Mulla DBA Seems like the FED is having problems with the politicians and I always have said this

  • We know how they feel but there are never good news these days . You have to have the roses with the thorns and there are more thorns now then ever I thank you Firozali A. Mulla DBA

    • DurdyDawg

      Yes, you have to have thorns if you want roses but you don’t have to endure the thorns so much with correct pruning and THAT seems to be what’s lacking in the nation’s flower bed.. They treat our country with cow dung then sit back and wait for the smell to end while continually hoeing the same old shit.

  • I said it wa all of the republican’s fault….and I know that my recipe of Psalms are working…and I will continue with them…the same I did on election night…believeing that, Jesus Christ, will answer those prayers in a hurry….my Doctor, from Pakistan, called at 9. p.m. and said he was worried…and I told him not to worry…I would meditate and pray with that recipe of mine…and it was all over by 11 p.m. I know that God is still in charge…that is the “FAITH AND TRUST” I have in my Lord and Savior…I am giving the republicans enough rope to hang themselves by wanting to hurt the President…in the Bible…it clearly states….”That No Weapon Formed Against Me Will Prosper or Suceed…so, in this instance…when I Pray…God is removing all the negative thoughts and curses that anyone is and has been putting on, Obama,….it is looking better and better everyday…and it will even be looking better by the end of June…I am not stopping one day or night…to see how nervous and argumentative that the republicans get….that is all the negativity going back on them…and,Obama…is a Christain
    …because he knows a lot of verses from the Bible that I dwell on…he has e-mailed me a few times…and again…I love it how he lets all of you believe what you want to think and believe….but, he and Michelle both are Christians…and, I am proud to have that American that is a true humanitarian…in the White House…it is all Congresses faults for the mess we are in today..because it is Congress that rules the USA…and they have cut funding to protect those diplomats that go overseas…like in Benghazi…and other countries…and has mad cuts to the IRS and cut back on the staffing of it and the funding of it…it is the worse Congress we have had in a long time…and pretty soon…the American People will relalize this.

  • demhack

    ben, the concerns your outlining were alllll Obama initiatives and ones the dem house and senate were in agreement on.
    want to fix the economy have the federal govt place a moratorium on Alllllll new rules and regulation for the next 2 years and get rid of all that they created in 2011 and 2012

  • Republicans, if they are sincere about America, should take Economics 101.

  • IN USA NOW That is the vow President Barack Obama and congressional
    leaders are making in the wake of the IRS tea-party targeting sandal. It’s a good
    talking point. Finding the fix that everyone can agree to is much harder.

    Consider
    this: House Ways and Means Committee Chairman Dave Camp says the IRS is “too
    large, too powerful, too intrusive and too abusive.” Obama, meanwhile, says the
    problem stems in part from “ambiguity” in the laws about the political
    activities the IRS is supposed to root out among non-profits. One thing is certain: Big changes are ahead at the IRS. Here
    are some fixes generating buzz among lawmakers and tax experts. Punishments Republicans have fumed that — beyond high-level resignations —
    there has been little action to discipline IRS employees who singled out
    conservative groups. Lawmakers might pass legislation to make sure there are
    big consequences for employees who engage in such targeting activities again —
    right up to throwing the workers in jail. Rep. Mike Turner (R-Ohio) and Sen.
    Marco Rubio introduced legislation this week that would give IRS employees who
    commit the so-called 10 deadly sins up to five years imprisonment. I never knew
    this was punishable but if it I am voting for all the GITMO inmates to be released.
    I thank you Firozali A.Mulla DBA But one thing is certain . There have been
    goof ups in the FED and the leaders and many try to hide. OH for the medias. They
    dig up and that is the best of the news

  • Robert P. Robertson

    Heh-heh-heh-heh. . .

  • 1standlastword

    The nerve of this “bailster” and creature of crony capitalism to condemn his friends (T/GOP) of the corporate gangsters he sleeps with for what they have done to hold main street down
    Bernanke is playing the role of the sheep in wolf’ clothes!!!!!

    He’d grind our bones to make cornmeal for himself and his Goldman pals any day….all they have to do is say the word like they did to get paid for reckless speculating and “ripping the faces off” naïve investors