The Post reports: “Federal Reserve Chairman Ben S. Bernanke told senators at a hearing Tuesday that ‘economic activity appears to have decelerated somewhat’ and ‘the reduction in the unemployment rate seems likely to be frustratingly slow.’ ” Somewhat? If the forecasters are right, we’ll b getting close to 0 percent growth.
But Bernanke also told elected officials to get their act together:
“Do no harm,” Bernanke admonished lawmakers Tuesday, repeating a warning to policymakers to take action to avoid the sharp spending cuts and tax hikes.
Economists say that the automatic actions slated to take place at the end of the year — an increase in payroll taxes and in marginal tax rates, as well as large cuts in domestic and defense spending — would tip the country back into recession.
Congress could prevent that outcome, and lawmakers are already pledging to do so — only on their terms, creating fears of more gridlock. Democrats insist that taxes rise for higher-income earners; Republicans want to include the affluent in any renewal of the Bush-era tax cuts.
Meanwhile, the prospect of a government-induced recession is already taking a toll on the economy.
Bernanke’s assessment overall was “bleak,” as the Wall Street Journal describes it: “Among his latest concerns was the outlook for business investment. In June, the Fed said investment was continuing to advance. But in his testimony, Mr. Bernanke marked down his assessment. Mr. Bernanke said investment had decelerated in the first part of the year and added that he foresaw ‘further weakness ahead.’”
That’s the Obama economy, which explains why the president wants to throw mud rather than do his day job. Oh, and meanwhile, Bloomberg reports: “The U.S. would lose 710,000 jobs and economic output would fall by 1.3 percent, or $200 billion, if tax cuts for high earners are allowed to lapse, said a report prepared for the U.S. Chamber of Commerce and other supporters of the tax breaks.” But Obama and the media are fixated on campaign chatter, confirming that they are disconnected from the reality ordinary Americans experience.
Now, the House speaker has offered to make a deal to keep us from going over the cliff. Senate Minority Leader Mitch McConnell (R-Ky.) chided Democrats yesterday for insisting on a tax hike:
“Make no mistake: What the Democrats are proposing today is an entirely avoidable high-stakes game of chicken with the single-minded goal of taking more money from those who earn it, for government to waste.”
Well, that leaves President Obama and Senate Democrats to fiddle while the economy burns to the ground. Here’s a idea for Obama: Instead of telling business owners and job creators they didn’t really build their own business, cut taxes and loosen regulations so they can make a stab at hiring some more people. Or are we to solve our economic woes by hiring more teachers, taxing the rich and piling on stacks of regulations? We know Obama’s answer already.