Congress steering US economy toward a 'fiscal cliff', per Ben Bernanke (perhaps repubs should continue the 'party of no' strategy since its working so well.

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    Apr 26, 2012 8:18 PM GMT
    Fed Chairman Ben Bernanke calls it the “fiscal cliff.” It might be better thought of as the next economic Armageddon.

    Unless Congress acts to soften the blow, economists are warning that a looming year-end collision of massive, “automatic” cuts in federal spending and the expiration of sweeping Bush-era tax cuts could crush an already weak U.S. economic recovery.

    And unlike the central bank’s response to the Panic of 2008, the Fed would be powerless to offset the catastrophic impact on the economy and financial markets.

    "There is absolutely no chance that the Federal Reserve would be able to have the ability whatsoever to offset that effect on the economy," Mr. Bernanke told reporters Wednesday, following a two-day meeting of the Fed's policy-making committee.

    The risk of a potential economic train wreck stems from a series of contentious political decisions that Congress has been ducking for years, postponing a long list of tough choices until the end of the year, until after the national elections.

    Now, unless a compromise is reached, sharp cuts in federal spending will remove hundredsof billions of dollars from the U.S. economy, virtually overnight. At the same time, American consumers will see a massive increase in taxes that will sharply curb their spending power, taking another big bite out of the economy.



    At some point the repubs are going to have to come to the fact that cuts alone will not solve the problem, there must be a hefty revenue side of the equation to fix this mess the Bushies started.

    Agree ?

    Disagree? Why ?
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    Apr 26, 2012 8:45 PM GMT
    Where do I start? Bernanke is a joke. I wonder how can anyone take him seriously. Keynesianism is morally and intellectually bankrupt. Try the following position by Murray N. Rothbard for a brief explanation:

    http://mises.org/money.asp