Roundup: What Bernanke Said to Congress

From Seeking Alpha's homepage, June 3, 2009

Bernanke's Latest Talk with Congress

• Bernanke to Congress: Don't Ignore Fiscal Balance
  by Tom Lindmark
• Bernanke's Fiscal Focus
  by Felix Salmon
• Bernanke on Recovery vs. Growth
  by John Jansen
• Why Did Bernanke Say What He Said?
  by Ryan Avent

Also: Bernanke brushes off Merkel rebuke (Brian Blackstone, WSJ)

More on: Economy, Government Policy

News: WSJ, Bloomberg, Reuters

Comments

[radicall:]

It is very easy to criticize someone. I have a lot of coworkers who do nothing themselves, but try to poke holes in any ideas others come up with.

While I agree that no party is perfect, there is some good in what Obama/Timmy/Ben have done. They didn't create the financial meltdown, but did help solve it. Of course it is going to have long term side effects - but at least we are out of the downward spiral.

I challenge any of the contributors to come up with a better solution (even with the benefit of hindsight). Here is your reality - unemployment looks like it is going to 20% in a year, capital and risk taking - which is the basis of capitalism is nowhere in sight, asset values are plunging.

Your goal - keep people from having to go out on the streets - homeless and hungry and crime from increasing, stabilize the downward spiral in asset values, bring back economic growth, help create jobs, bring liquidity back to capital markets, cut down budget deficits, prevent hyper-inflation in the long run, increase GDP and oh.. keep opposition party happy.

Where it comes to reducing debt to GDP ratio, there are 3 ways:
#Reduce Spending (and allow economy to spiral downwards)
#Increase taxes to fill the gap between income and expense (Top tax rate was 91% in 1945)
#Increase GDP by stimulating economic activity

1 and 3 are mutually exclusive in the current environment. Love to hear what others think in terms of solutions.
#

Jun 06 01:23 AM

[sheople:]

radicall -- The Federal Reserve was complicit in what has happened. Interest rates were not at a level to stop the economy from overheating. Then to use taxpayer debt to sustain businesses is not a free market requisit. The (especially financials) should have been allowed to fail. The benefit to the citizens would have been a more tolerable debt level. Of course congressional/administ... spending is unsustainable. Of course our economy is in shambles. More spending is just enabling.

Jun 07 08:41 AM