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Bernanke: deep spending cuts could derail recovery ('self-inflicted wound' looms)
Yahoo ^ | 7/14/11 | Mark Felsenthal and Pedro Nicolaci da Costa - Reuters)

Posted on 07/14/2011 10:03:10 AM PDT by NormsRevenge

Federal Reserve Chairman Ben Bernanke warned Congress on Thursday that overzealous cuts to government spending could derail an already fragile recovery and said a U.S. 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 members of the Senate Banking Committee.

Congress and the White House are stalemated in talks on cutting the budget deficit, with Republicans seeking $2.4 trillion in spending cuts in exchange for agreeing to raise the $14.3 U.S. government borrowing limit. The U.S. Treasury has said it will run out of money after August 2 to pay all of the country's bills if the a deal is not reached to raise the debt ceiling.

On the second day of delivering the Fed's semiannual monetary policy report to Congress, Bernanke renewed his warning that a U.S. 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.

(Excerpt) Read more at finance.yahoo.com ...


TOPICS: Breaking News; Business/Economy; Government; Politics/Elections
KEYWORDS: bernanke; derail; recovery; spendingcuts
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Let them eat .. crabcakes!
1 posted on 07/14/2011 10:03:16 AM PDT by NormsRevenge
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To: NormsRevenge

it will definitely drive unemployment up at first... public service employment especially, which is the point.


2 posted on 07/14/2011 10:05:14 AM PDT by rhombus
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To which the crowd says..

What Recovery? ;-]


3 posted on 07/14/2011 10:05:46 AM PDT by NormsRevenge (Semper Fi ... Godspeed .. Monthly Donor Onboard .. Obama: Epic Fail or Bust!!!)
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To: NormsRevenge

And who’s pocket is Ben Boy in?.......


4 posted on 07/14/2011 10:07:24 AM PDT by AngelesCrestHighway
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To: NormsRevenge

” derail recovery “

It’s okay, then...

No recovery, no problem....


5 posted on 07/14/2011 10:07:50 AM PDT by Uncle Ike (Rope is cheap, and there are lots of trees...)
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To: NormsRevenge

Translation. Stopping borrowing will ruin all my plans to keep the Ponzi going.


6 posted on 07/14/2011 10:08:31 AM PDT by screaminsunshine (Socialism...Easier said than done.)
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To: NormsRevenge

Don’t worry Ben!....that train has definitely not left the station.


7 posted on 07/14/2011 10:09:06 AM PDT by AngelesCrestHighway
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To: NormsRevenge

Overzealous cuts to government spending??? Is he for real??? So, tightening belts will get us further in debt? No wonder we’re in such a mess. Slash government spending to the quick. Don’t pay congress. Don’t pay the Whiny Butt in Chief and don’t let him or Mooch-elle go on any more vacations. No more golf games or ice cream until the budget is in the black.


8 posted on 07/14/2011 10:09:21 AM PDT by bgill
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To: NormsRevenge
On the other hand (and all good economists have at least two hands), cuts in government without tax increases could show business owners that the Congress is finally serious about taking on the debt and get business producing and hiring again.

Most Keynesian theories on government stimulus require that consumers and businesses only become enthused with the piles of government money being passed around but never look at (or even worse panic over) the huge debt being piled on the nation. I think we've hit the point where every dollar of government "stimulus" is actually depressive because one person gets that dollar and three hundred million look at the debt.

9 posted on 07/14/2011 10:09:28 AM PDT by KarlInOhio (The Dems demanding shared sacrifice are like Aztec priests doing it while cutting out my heart.)
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To: NormsRevenge

There is no recovery

10 posted on 07/14/2011 10:10:33 AM PDT by lonevoice (Life is short. Make fun of it.)
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To: NormsRevenge

Recovery? What did I miss?


11 posted on 07/14/2011 10:10:33 AM PDT by DirtyDawg (eat fruit)
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To: Uncle Ike

” derail recovery “

make that High-Speed derail job

Obama is bent on the obliteration of this nation as it was established.

Ben is a puppet too.. ya have to look close but the strings are there.


12 posted on 07/14/2011 10:12:47 AM PDT by NormsRevenge (Semper Fi ... Godspeed .. Monthly Donor Onboard .. Obama: Epic Fail or Bust!!!)
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To: NormsRevenge; All

Ben Bernanke, Bambi’s Buttboy, blows at bamboozling.

Think about it. This jackass says, essentially, shrinking the federal government is a danger to our economy.

The GROWTH of the federal government is the danger...but he sat there and said what he said with a straight face.


13 posted on 07/14/2011 10:12:47 AM PDT by Recovering_Democrat
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To: NormsRevenge

“We’ve maxed out our Visa and those dirty Republicans are balking at letting us max out our Mastercard!”


14 posted on 07/14/2011 10:13:22 AM PDT by PogySailor (The ruling class will not go down easily. And neither will their paid hacks.)
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To: NormsRevenge
At some point, the vast majority of Americans will simply stop believing these lying oligarchs.

If there is pain when socialism is derailed, it will be purposely inflicted by those among the financial elite who wish to punish us for diminishing their power.
15 posted on 07/14/2011 10:16:35 AM PDT by Antoninus (What part of "I won't vote for Romney under any circumstances" don't you understand?)
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To: NormsRevenge

Bernanke is now a full collaborator in the destruction of the United States. The sole purpose behind QE is to fully fund government excess. Raising the debt ceiling will simply give Bernanke permission to initiate a further expansion of the money supply directly into government coffers. All of these traitors should be drawn and quartered.


16 posted on 07/14/2011 10:17:20 AM PDT by Hoodat (Yet in all these things we are more than conquerors through Him who loved us. - (Rom 8:37))
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To: NormsRevenge
sheesh...where's the “shared sacrifice” from the government? (snark)
17 posted on 07/14/2011 10:17:38 AM PDT by BookmanTheJanitor
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To: All
If they prioritize and make sure they are getting value for the dollars spent, the negative impact to the cuts will be minimized in the short term and will benefit the economy in the long term. We have been paying too much for everything and have not received a reasonable return on our dollars.
18 posted on 07/14/2011 10:17:56 AM PDT by LuvFreeRepublic (Support our military or leave. I will help you pack BO!)
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To: lonevoice
Ben “Spoon boy” Bernanke!
19 posted on 07/14/2011 10:18:14 AM PDT by frogjerk (Liberalism: The ideology of envy.)
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To: NormsRevenge

By “recovery,” Bernanke means the stimulus his elitist fascist are getting from the Fed.


20 posted on 07/14/2011 10:18:41 AM PDT by pallis
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To: NormsRevenge

Translation: I just want to keep this thing from exploding until after I leave my post, publish my memoirs, and move to Geneva, Switzerland. After that, I couldn’t care less.


21 posted on 07/14/2011 10:18:48 AM PDT by rbg81
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To: LuvFreeRepublic

” If they prioritize and make sure they are getting value for the dollars spent, “

Oh, they’ll prioritize all right — the priority will be whatever causes the most pain to the greatest number of people (seniors, veterans, military) for the least gain...

And blame it on the TEA Partiers....


22 posted on 07/14/2011 10:21:55 AM PDT by Uncle Ike (Rope is cheap, and there are lots of trees...)
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To: NormsRevenge

I realize (sad face) Congress will cave, like they caved on the bailouts. But I do have this (pleasant) dream of waking up the morning of Aug 2nd no debt ceiling raised. And guess what the world did not stop spinning. : )

These Bernanke doomsayers are starting to remind me of those nuts that tell you every year on so and so date the world is coming to an end. And I wake up on that day, still here. : )


23 posted on 07/14/2011 10:22:45 AM PDT by moshiach
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To: NormsRevenge

Ben Bernanke:

(February 15, 2006) “Housing markets are cooling a bit. Our expectation is that the decline in activity or the slowing in activity will be moderate, that house prices will probably continue to rise.”

(January 10, 2008) “The Federal Reserve is not currently forecasting a recession.”

(March 28, 2007) “At this juncture, however, the impact on the broader economy and financial markets of the problems in the subprime market seems likely to be contained. In particular, mortgages to prime borrowers and fixed-rate mortgages to all classes of borrowers continue to perform well, with low rates of delinquency.”

(July, 2005) “We’ve never had a decline in house prices on a nationwide basis. So, what I think what is more likely is that house prices will slow, maybe stabilize, might slow consumption spending a bit. I don’t think it’s gonna drive the economy too far from its full employment path, though.”

(February 15, 2007) “Despite the ongoing adjustments in the housing sector, overall economic prospects for households remain good. Household finances appear generally solid, and delinquency rates on most types of consumer loans and residential mortgages remain low.”

(November 15, 2005) “With respect to their safety, derivatives, for the most part, are traded among very sophisticated financial institutions and individuals who have considerable incentive to understand them and to use them properly.”

(January 18, 2008) “[The U.S. economy] has a strong labor force, excellent productivity and technology, and a deep and liquid financial market that is in the process of repairing itself.”

(May 17, 2007) “All that said, given the fundamental factors in place that should support the demand for housing, we believe the effect of the troubles in the subprime sector on the broader housing market will likely be limited, and we do not expect significant spillovers from the subprime market to the rest of the economy or to the financial system.  The vast majority of mortgages, including even subprime mortgages, continue to perform well.  Past gains in house prices have left most homeowners with significant amounts of home equity, and growth in jobs and incomes should help keep the financial obligations of most households manageable.”

“The GSEs are adequately capitalized. They are in no danger of failing.”

(Two months before Fannie Mae and Freddie Mac collapsed and were nationalized) “They will make it through the storm.”

“I don’t think that Chinese ownership of U.S. assets is so large as to put our country at risk economically.”

(June 10, 2008) “The risk that the economy has entered a substantial downturn appears to have diminished over the past month or so.”

...

http://theeconomiccollapseblog.com/archives/say-what-30-ben-bernanke-quotes-that-are-so-stupid-that-you-wont-know-whether-to-laugh-or-cry


24 posted on 07/14/2011 10:23:45 AM PDT by Qbert ("The best defense against usurpatory government is an assertive citizenry" - William F. Buckley, Jr.)
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To: NormsRevenge

So let me understand this:

Deep spending cuts are bad.

Not borrowing more money than we can afford to pay back is bad.

So the best course of action to maintain our credit rating and grow our economy is to keep borrowing until the rating agencies drop us to junk status.

Where do we find these idiots?


25 posted on 07/14/2011 10:23:52 AM PDT by Maceman (Obama: As American as nasei goreng)
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26 posted on 07/14/2011 10:24:25 AM PDT by TheOldLady (FReepmail me to get ON or OFF the ZOT LIGHTNING ping list.)
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To: NormsRevenge

Idiot-fool!
Drop corporate income tax down to 15% and couple it with governmental spending cuts and you’ll see double-digit growth in this country...just for kicks, make CapGains rate at 15% for 2 yrs!


27 posted on 07/14/2011 10:25:41 AM PDT by CincyRichieRich (Keep your head up and keep moving forward!)
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To: NormsRevenge
sharp and excessive cuts in the very short term

Be still my heart-if only someone was actually proposing such a thing.

28 posted on 07/14/2011 10:25:53 AM PDT by Raycpa
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To: NormsRevenge

Good grief, Ben. There are not CUTS. They are only reductions in the rate of growth even in the most ambitious proposals.


29 posted on 07/14/2011 10:26:25 AM PDT by WashingtonSource
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To: NormsRevenge

Idiot-fool!
Drop corporate income tax down to 15% and couple it with governmental spending cuts and you’ll see double-digit growth in this country...just for kicks, make CapGains rate at 15% for 2 yrs!


30 posted on 07/14/2011 10:26:38 AM PDT by CincyRichieRich (Keep your head up and keep moving forward!)
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To: NormsRevenge

So we can spend ourselves into prosperity? All these years I’ve misunderstood the basics of economics. Hell, this is a great time to pull out all the stops and spend money like a drunken sailor (no offense to sober ones). If we do that we’ll have prosperity coming out the wazoo!


31 posted on 07/14/2011 10:27:03 AM PDT by Portcall24
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To: NormsRevenge

What recovery???? Hiring more Rats into worthless Government Jobs?? GOOD, I hope all that stops!


32 posted on 07/14/2011 10:27:48 AM PDT by Cheetahcat ( November 4 2008 ,A date that will live in Infamy.)
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To: NormsRevenge
What's the big deal here.

Bernanke is correct - a US debt default would be a disaster world wide

The US will not default on it's debt. We are Constitutionally mandated to pay our debt.

What we will have to do is make hard choices where and how the money we do have is spent.

33 posted on 07/14/2011 10:28:02 AM PDT by rdcbn
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To: Recovering_Democrat

I despise this Obama handmaiden. Imagine the chairman of the Federal Reserve advocating more spending, rather than spending cuts that would free up private capital.


34 posted on 07/14/2011 10:28:39 AM PDT by mwl8787
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To: NormsRevenge

Ben is what we call, “stark raving stupid”.


35 posted on 07/14/2011 10:29:11 AM PDT by Psycho_Bunny (Public employee unions are the barbarian hordes of our time.)
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To: NormsRevenge
Failure to raise the debt limit in time would constitute a "self-inflicted wound" to the economy, he added.

But Barry said that we had to rip the Band-Aid off

Which one is it?

36 posted on 07/14/2011 10:31:29 AM PDT by COUNTrecount (Barry...above his poi grade.)
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To: Hoodat

Could it be that we are so far over the edge that the only way to delay the inevitable is to keep printing money?


37 posted on 07/14/2011 10:32:15 AM PDT by TSgt (When in the Course of human events...)
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To: NormsRevenge

I’ve said it before and I’ll say it again. Just rip the bandage off this sucking chest wound of an economy and let the healing begin! I’d like to be able to say I’ll be back to even in another decade. But, I’m just a dumb little chicken farmer from the Midwest. WhatthehelldoIknow?

Nothing is going to happen until we hit rock bottom. Well, in reality, we’ve already HIT rock bottom and Government keeps blasting and digging!

Grrrr!


38 posted on 07/14/2011 10:33:23 AM PDT by Diana in Wisconsin (I don't have 'Hobbies.' I'm developing a robust Post-Apocalyptic skill set...)
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To: NormsRevenge
He wants a collapse. That's when they get to cash in, buying the nation's assets for pennies on the dollar, similar to what was done to the Soviet Union.
39 posted on 07/14/2011 10:35:38 AM PDT by Carry_Okie (GunWalker: Arming "a civilian national security force that's just as powerful, just as well funded")
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To: NormsRevenge
......sharp and excessive cuts in the very short term would be potentially damaging to that recovery,"

Please tell me how some of these cuts would be damaging to the economy:

Presidential Campaign Fund: $775 million savings over ten years.

Eliminate Mohair Subsidies: $1 million annual savings.

Eliminate taxpayer subsidies to the United Nations Intergovernmental Panel on Climate Change: $12.5 million annual savings

Eliminate the National Organic Certification Cost-Share Program: $56.2 million annual savings.

Eliminate fund for Obamacare administrative costs: $900 million savings.

Cut in half funding for congressional printing and binding: $47 million annual savings

Trim Federal Vehicle Budget by 20%: $600 million annual savings

Cut Federal Travel Budget in Half: $7.5 billion annual savings

Eliminate duplicative education programs. H.R. 2274 (in last Congress), authored by Rep. McKeon, eliminates 68 at a savings of $1.3 billion annually.

U.S. Trade Development Agency:$55 million annual savings.

Woodrow Wilson Center Subsidy: $20 million annual savings.

John C. Stennis Center Subsidy: $430,000 annual savings.

Community Development Fund: $4.5 billion annual savings.

Heritage Area Grants and Statutory Aid: $24 million annual savings

These are just a small percentage of what is/should be on the table but - take a look at these expenses, most,if not all are pork to favorite causes or, expenses for our congress critters to function off of taxpayer monies.

40 posted on 07/14/2011 10:43:03 AM PDT by capydick (''Life's tough.......it's even tougher if you're stupid.'')
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To: NormsRevenge
Bernanke's the embodiment of the quote, "When you have a hammer, every problem looks like a nail."

A government banker, whose solution for every problem is . . . < drumroll>

THROW MONEY AT IT. < cymbal crash>

He is doing little more than perpetuating the chicken-little-in-chief's "sky is falling" hyperventilation.

His next pronouncement will be something about old people eating cat food and his next tee time, if he follows 0's lead.

41 posted on 07/14/2011 10:44:09 AM PDT by Quiller (When you're fighting to survive, there is no "try" -- there is only do, or do not.)
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To: NormsRevenge

When would be a good time Ben? Or do you think we can keep doing this forever?


42 posted on 07/14/2011 10:46:22 AM PDT by DManA
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To: DManA
Ben about a month ago said he has tried everything he knows and nothing it working.

Bennie we tried a 800 Billion Stimulus and that didn't work.

Ben is the definition of insanity do the same thing over and over and expecting a different result.

43 posted on 07/14/2011 10:51:42 AM PDT by scooby321
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To: NormsRevenge
How does one go about derailing a train wreck?

Derail over 400,000 unemployment claims per week?

Derail less than 20,000 new jobs per month?

Derail 9.2% (bogus number I know) unemployment and actual unemployment of over 17%?

Derail housing markets that have houses going for 1/3 of their 2005 value?

Need to take on more debt to show we can handle our national debt?

If we refuse to take on more debt it means we can't handle our debt?

What fricking planet do these fools live on?

44 posted on 07/14/2011 11:02:59 AM PDT by N. Theknow (I am a Carnivore Conservative - No peas for me.)
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To: NormsRevenge

Repeal obummercare, eliminate the EPA, TSA, and several other organizations and it will fix our debt.


45 posted on 07/14/2011 11:08:18 AM PDT by Arrowhead1952 (zero hates Texas and we hate him back. He ain't my president either.)
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To: NormsRevenge

This imbecile will never get another term.


46 posted on 07/14/2011 11:11:15 AM PDT by grumpygresh (Democrats delenda est)
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To: NormsRevenge

This time it is, in part, Bush’s fault. He appointed Bernanke. Why George, why?


47 posted on 07/14/2011 11:16:00 AM PDT by Signalman
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To: frogjerk

LOL!


48 posted on 07/14/2011 11:17:49 AM PDT by lonevoice (Life is short. Make fun of it.)
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To: Qbert
You beat me to it with those great posts showing Ben's razor sharp forecasting skills.

He's our best current example of "He whose bread I eat is the song I sing"

49 posted on 07/14/2011 11:19:07 AM PDT by Notary Sojac (I have not heard a single Michele or Cain backer threaten to stay home if Palin is nominated.)
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To: NormsRevenge

There were those one FR who told me in 2007 that any raise in interest rates would shut down most businesses.

I said “If you are depending on loaned money to stay afloat, you are already in deep trouble,” and got flamed out of the thread. Turns out I was right.

I will say this to Ben. If the only thing keeping our economy going the way it is right now is credit, we are screwed no matter way.


50 posted on 07/14/2011 11:23:32 AM PDT by redgolum ("God is dead" -- Nietzsche. "Nietzsche is dead" -- God.)
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