He harps on the need for congress to get spending under control over and over and over again, and then comes out with this.. WASHINGTON (Reuters) - Federal Reserve Chairman Ben Bernanke said on Wednesday a Republican spending cut plan would not cause a big dent to U.S. economic growth, but could cost around 200,000 jobs over two years. "What I have been trying to focus on is, we have got to keep our eye on deficit reduction, but we need to think about it in a long-term framework." I mean, seriously.
he's in the hot seat, so it's not fair to criticize every little thing he says. I'm just saying this as a man. I have a lot of sympathy for his predicament. That said, I would argue that Republican spending cuts, are not what we need right now. The economy is too fragile. The recovery is too fragile. We're between a rock and a hard place, but to me, now is not the time to get aggressive about balancing the budget. just an afterthought: It seems like we keep having the same debates day after day on this site. At best we get little nuances to the debate.
Buffet came out and said that bens money printing is a bad idea. Inflation creeps up on you and you cant reverse it very easy once its here. Not saying the oracle is 100% right though.
Money printing does not cause inflation In the case of USD, 80% of printed USD is used overseas and does not cause inflation in US.
Sounds like he's saying they're cutting the deficit in less-than-optimal ways. Hard to argue against that...
- cut spending - raise taxes - hope economy rebounds and tax revenue increases I say do a little bit of all 3.
Wasn't Bernanke talking about a longer timeframe for reducing the deficit? Our national debt was very high after WWII, and was reduced over time... Isn't it unrealistic to believe we are going to reduce the debt load in just a few years? I know it makes for good politics, but... We should start ASAP, but all politicians, including the Tea Party'ers talk about reducing this and that, but the American public only want cuts to foreign aid, and some military. Most of us know that Social Sesurity, Medicare etc. have to be cut to make a real dent in the mountain of debt... Ask your friend/co-worker/neighbor what cuts they want, the answer might not surprise you... http://zfacts.com/p/1195.html
i agree completely. oh and by the way there is no inflation. The CRB Food Index was up 30% last year. but thats no big deal.
Is this a fact or just another personal opinion? This is completely new to me. I thought most of QE1 was handed out to the fatcats on Wall Street with what little there was afterward given to the states for various economic projects. QE2 was largely spent to buy up the Treasuries in an effort to drive down the interest rate. Anyway, had we spent 80% overseas, it would most likely be on cheap imports from China. If so, that would indeed have a deflationary effect on our economy, considering how cheap their labor market is. However, such a scenario only works in a healthy economy. We're still in a recession. Where is the demand to suck up all that supply?
The proposed $60 billion in cuts is NOT aggressive. You need to look at the size of the whole budget to realize that $60B is just a starting point. I love the media portrayal of the cuts as "drastic" - listen any other non-gov't entity could deal with cuts like these without any problem, only in the gov't is any cut in spending treated like the end of modern civilization. I wonder how we ever survived without all these multitude of programs years ago (before they existed)....must have been dark times indeed. Unemployment is going to remain elevated for a long time so the idea that we need to wait for unemployment to return to "normal" before we can start tackling the deficit is a basically saying you want to punt on the hard work required. Also lets not forget there is no free lunch: dollars for gov't spending either comes from taxes (which means money that could probably be put to better use if not taken by the gov't) or borrowing which has its own set of long-term problems that we need to face. Shrinking the size of the gov't is not going to shrink the GDP - it is going to allow the private sector to grow, growth that excessive gov't spending curtails.