From the NEW YORK TIMES:
The Federal Reserve chairman, Ben S. Bernanke, delivered a detailed and forceful argument on Friday for new steps to stimulate the economy, reinforcing earlier indications that the Fed is on the verge of action.
Calling the persistently high rate of unemployment a “grave concern,” language that several experts described as unusually strong, Mr. Bernanke made clear that a recent run of tepid rather than terrible economic data had not altered the Fed’s will to act, because the pace of growth remained too slow to reduce the number of people who lack jobs…In setting the stage for action when the Fed’s policy-making committee meets in two weeks, Mr. Bernanke appeared to defy political pressure from Republicans to refrain from new measures.
Mitt Romney, the Republican presidential nominee, has said such action would be counterproductive, and has pledged to replace Mr. Bernanke at the earliest opportunity…
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EDITOR: Fifty years down the road, historians will place the blame for the prolonged hard times on the Republican controlled House of Representatives that rebuffed Obama Administrations efforts to provide additional fiscal stimulus, as recommended almost unanimously by leading economists and in accordance with Keynesian Economics.
Monetary efforts to keep interest rates low are helpful, but cannot take the place of generating consumer demand through government spending. What business person wants to borrow money to invest if there is little or no demand for goods and services?
As for reducing the annual deficit, how can this be achieved with high unemployment? People out of work collect money from the government and are not paying taxes! Only a return to prosperity, such as during the latter Clinton years, enables the reduction of the National Debt.
What? Are we that ill informed to believe keynesian economics and a promise of national debt reduction (which has happened only 3 times in my lifetime) will work? I will be fooled no more. The plan of the political class is for a major tax increases on the middle class because that is where the money is, plus major inflation to reduce the cost of the money the government is borrowing. This isn’t rocket science! It’s economics.