By Celia Murray
Federal Reserve Chairman Ben Bernanke expects the American economy would gain strength in the coming months IF Congress doesn’t throw up too many roadblocks. As Roll Call reported on his comments, “Congress is the main impediment to a more robust economy.” Bernanke and others expect Republicans in Congress to make things worse before the end of the year by insisting on deeper cuts.
Chairman Bernanke appeared last week before the House Financial Services Committee in what was likely his last report on the Fed’s conduct of monetary policy. Bernanke will conclude his second term as chairman in January and is expected to step down. Bernanke insisted that the Fed remain committed to its economic stimulus campaign while the economy remains weak, acknowledging that unemployment remains stubbornly high and economic growth is tepid. He noted that Federal spending cuts are reducing growth this year by about 1.5 percentage points. But while the Fed expects the impact to diminish next year, he said there is a risk Congress will create new problems for the economy. Congress itself, Bernanke warned, remains the greatest obstacle to faster economic growth. “The economic recovery has continued at a moderate pace in recent quarters despite the strong headwinds created by federal fiscal policy,” he said (emphasis added).
“The risks remain that tight federal fiscal policy will restrain economic growth over the next few quarters by more than we currently expect, or that the debate concerning other fiscal policy issues, such as the status of the debt ceiling, will evolve in a way that could hamper the recovery,” Mr. Bernanke said.
Bernanke worried that the House and Senate are contemplating additional austerity measures this year that would curb the economic expansion even more. As Roll Call reported, “Bernanke’s warnings were that keeping the deep sequester cuts in place much longer would slow growth for longer than expected– or that another showdown over raising the Treasury’s borrowing limit would spook the financial markets and make consumers anxious. ”
The GOP should listen to Bernanke. He has a PhD in economics from the Massachusetts Institute of Technology and served as chairman of President George W. Bush’s Council of Economic Advisors. However, as the Atlanta Journal-Constitution’s Jay Bookman pointed out, they prefer to “take economic advice from radio talk-show hosts filling air time between “buy gold now!” commercials, and from people who attend town halls dressed in Revolutionary War garb and waving the Gadsden flag.”
Congressional Republicans appear determined to take any position they feel would be damaging to the Democratic president, even at the cost of a growing economy. Almost 60 years ago, John F. Kennedy expressed an opinion that would be considered heresy by today’s GOP– “sometimes party loyalty asks too much.” It’s time for the GOP to put country first.
Celia Murray is a member of the Morgan County Democratic Committee.