Fed Chief Freaks Out

The man who coined the term “fiscal cliff,” Fed Chairman Ben S. Bernanke, is getting worried the monster he named will gobble up any hopes of an economic recovery. He fears the automatic federal spending cuts and tax increases that would result without a deal between the White House and Capitol Hill Republicans.
panic

“If the economy actually went off the fiscal cliff . . . that would have very significant adverse effects on the economy and on the unemployment rate. We would try to do what we could . . . but I just want to again be clear that we cannot offset the full impact of the fiscal cliff. It’s just too big.” — Bernanke, news conference (12/13)

Bernanke is backing up his fears with an aggressive plan by the Federal Reserve to bolster employment.

Just as some in both political parties are making noises that going off the “cliff” wouldn’t be so bad, Bernanke seems to be in a panic (at least by the understated standards of his world). I never like to see Fed chairmen freak out. That just can’t be good.

15 thoughts on “Fed Chief Freaks Out

  1. Nothing gets done until after Jan 1. Then we no longer have to raise the taxes on anybody and it become “Tax cut for the world!!!!!”.

    Jack

  2. The numbers I’ve been seeing is a reduction of the GDP of .5% pts of a GDP that the most optimistic believe will grow by 2%. The pessimist believe we may already be in a recession or close and this may tip us into one.
    Not the end of the world but not pleasant either.

    Jack

  3. In 08 the Fed. ran into a problem that was almost too big to handle. Me thinks that they don’t want to go there again.
    The printing presses simply can’t run fast enough. ;-)

  4. It will be interesting seeing if the next four months puts China’s sovereign debt rating above ours--seems that’s what our dysfunctional government is working towards.

  5. That’s what’s wrong with Dr Rice’s story. She didn’t have a really savvy non-political person in State whispering tactical warnings in her ear.

  6. Calling on a trailmix artist. David & I need a really good banner (1000 x 200 pixels) for the new blog. Right now the title is “Blank & White on Film” with a subtext of: “Two Coasts Two Commentators”. If anyone could come up with something wonderful, it would be really appreciated.

  7. What the whole globe is facing is the fact that technology has sidelined available work while still requiring that humanity not being allowed to starve all while that same population starts to consume beyond renewable resources. The Middle class was created by the simple expediency of wiping out close to 30% of global population with “The Black Death”. Following WW I the Influenza Epidemic helped keep it going. Wars and disease have served this useful (?) purpose for thousands of years.

    There is currently no where on earth not being trashed by man to one degree or another all while running out of work for the average person to do as mechanics and computers take over agriculture, manufacturing, and assembly. None of the possible short term solutions are pretty and the long term ones simply may not come in time to avoid what could be a major tragedy for human beings.

  8. Mr.Cracker and I would like to associate ourselves with AP’s remarks

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