Skip to comments.Fed Chairman Ben Bernanke warns of 'fiscal cliff' risks
Posted on 06/07/2012 7:18:21 PM PDT by bd476
WASHINGTON Fears about a looming fiscal crisis at the end of the year are starting to pinch job growth and threatening to undercut the nation's fragile recovery, a growing number of economists and employers say.
Federal Reserve Chairman Ben S. Bernanke, in testimony Thursday before Congress, repeatedly warned about the so-called fiscal cliff a reference to the expiration of tax cuts Dec. 31 and the imposition of automatic spending reductions Jan. 1.
By some accounts, the U.S. economy could see an unprecedented fiscal hit of as much as $720 billion if the slated changes take effect.
They would include an end to the temporary tax cuts enacted during the George W. Bush administration and to temporary Obama administration payroll tax reductions. Spending cuts in defense and on federal programs were negotiated as part of last summer's pact to raise the debt ceiling.
If all the changes take place, the shock will probably cause the economy to contract and possibly lead to a recession, Bernanke said.
So far, however, Bernanke's concerns about the fiscal cliff have been largely obscured by the more immediate, intensifying financial troubles in Europe and elsewhere.
On Thursday, China cut its interest rates, sparking worries that the sprawling economy might be doing worse than thought. There also is a widespread expectation that Congress will take last-minute action to pull back from the fiscal cliff.
Some analysts are skeptical that lawmakers can come together to avoid ... End of excerpt: 300 words from 1,174 word article.
Interesting article continues Fed Chairman Ben Bernanke warns of 'fiscal cliff' risks
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Ben Bernanke and Tim Geithner should be hopping around in shackles and orange jump suits.
But don’t worry.......the EBT cards, the Forever Unemployment check, and the Social Security Disability checks will keep increasing logarithmically under our Community Organizer.
There are 40 year olds who worked 20 years and now colecting what they put into SS through SSI. It may be you and me who are the stupid ones. :)
You can expect the Bernank to do every thing possible to be the Food Stamp President re-elected .... his chances of getting re-appointed are as good as Facebook selling for $600 a share.
We are so screwed, and I never even got a kiss.
We’re already over the cliff and Bennie knows it. Just resign Bern-yank-me.
I imagine he's taking quite a bit of heat from the WH on that one.
Yeah, but Uncle Ben is also itching to launch QEIII. Frankly, I think QEIII might be the one that pushes us over into a currency crisis. We’re only hanging on now because of the meltdown in Europe and the “flight to quality” (LMAO!) to the US$. But that won’t go on forever.
“I for one am glad Bernanke has been warning about not extending the Bush tax cuts.”
I think Bernanke was warning about the Republicans refusing to compromise and let all the tax cuts disappear rather than to do as the WH wants and extend them all except for those making over $250k a year (i.e., according to Bernanke, punish the 99% to protect the upper 1%).
Bernanke should do us all a favour and jump off that cliff. In the annals of “lying to Congress”, Bernanke and Henry Paulson take first prize with the bait and switch they pulled off on TARP.
Bernanke obviously is against the WH on that.
Ah yes, the election. It used to be, I think, that there was a meaningful phrase, “election year politics”, which at least suggested that at other times, the politicians were actually considering how to best govern the nation.