Bernanke endorses quick, temporary fiscal stimulus

[w¡n9Nµ7 §£@¥€r 123]

WASHINGTON (MarketWatch) -- Congress could help steer the economy away from recession if it adopted a quick, efficient and temporary fiscal stimulus plan, Federal Reserve Chairman Ben Bernanke told Congress on Thursday.

...

"To be useful, a fiscal stimulus package should be implemented quickly and structured so that its effects on aggregate spending are felt as much as possible within the next 12 months or so," Bernanke said. "Any fiscal package should be efficient... Finally, any program should be explicitly temporary."

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Without endorsing any specific ideas, Bernanke's comments appeared to favor Democratic proposals to quickly pass a temporary stimulus plan targeted at low- and middle-income families. "Getting money to low- and moderate-income families is good in terms of getting the most bang for the buck," Bernanke said.

Democratic stimulus proposals favor tax rebates and additional funds for unemployment benefits, food stamps, Medicaid and heating assistance.

Republicans, by contrast, have said they believe a longer view of the economy's potential is needed, not a temporary feel-good boost. Republicans have said extending the 2001 and 2003 tax cuts beyond their scheduled expiration in 2011 must be part of any fiscal package this year.

Bernanke, who is a Republican appointed by President Bush, said longer-run tax measures could actually hurt the economy. "A fiscal program that increased the structural budget deficit would only make confronting those challenges more difficult," Bernanke said.

http://www.marketwatch.com/News/Story/bern...4431A94C88AA%7D

Edited January 17, 2008 by VJ Troll

[simple_male 1]

WASHINGTON (MarketWatch) -- Congress could help steer the economy away from recession if it adopted a quick, efficient and temporary fiscal stimulus plan, Federal Reserve Chairman Ben Bernanke told Congress on Thursday.

...

"To be useful, a fiscal stimulus package should be implemented quickly and structured so that its effects on aggregate spending are felt as much as possible within the next 12 months or so," Bernanke said. "Any fiscal package should be efficient... Finally, any program should be explicitly temporary."

...

Without endorsing any specific ideas, Bernanke's comments appeared to favor Democratic proposals to quickly pass a temporary stimulus plan targeted at low- and middle-income families. "Getting money to low- and moderate-income families is good in terms of getting the most bang for the buck," Bernanke said.

Democratic stimulus proposals favor tax rebates and additional funds for unemployment benefits, food stamps, Medicaid and heating assistance.

Republicans, by contrast, have said they believe a longer view of the economy's potential is needed, not a temporary feel-good boost. Republicans have said extending the 2001 and 2003 tax cuts beyond their scheduled expiration in 2011 must be part of any fiscal package this year.

Bernanke, who is a Republican appointed by President Bush, said longer-run tax measures could actually hurt the economy. "A fiscal program that increased the structural budget deficit would only make confronting those challenges more difficult," Bernanke said.

http://www.marketwatch.com/News/Story/bern...4431A94C88AA%7D

We're already in recession.

[mawilson 2,133]

We're already in recession.

Of course you know better than the Fed Chairman.

[simple_male 1]

We're already in recession.

Of course you know better than the Fed Chairman.

No, Ben Bernanke knows much better than me, but he won't admit that we are in recession, he will only say if Fed acts now, we'll be able to prevent the economy going into the recession. Ask any apoliticial person who is knowledgeable in economy and market. I know a person, the Vice President of a Bank who said "saying that we are not in recession already is like saying Hurricane Katrina only did limited damage." This is his word and he knows the economy and market very well.

[Dan J 277]

We're already in recession.

Of course you know better than the Fed Chairman.

Everyone listens to what the fed chairman says, and the markets react accordingly. So he has to be really careful about what he says, or he could cause the markets to go in a bad direction.

[mawilson 2,133]

We're already in recession.

Of course you know better than the Fed Chairman.

No, Ben Bernanke knows much better than me, but he won't admit that we are in recession, he will only say if Fed acts now, we'll be able to prevent the economy going into the recession. Ask any apoliticial person who is knowledgeable in economy and market. I know a person, the Vice President of a Bank who said "saying that we are not in recession already is like saying Hurricane Katrina only did limited damage." This is his word and he knows the economy and market very well.

Still, you can't scream "recession" based on one month's data. It's too early to tell.

[simple_male 1]

We're already in recession.

Of course you know better than the Fed Chairman.

No, Ben Bernanke knows much better than me, but he won't admit that we are in recession, he will only say if Fed acts now, we'll be able to prevent the economy going into the recession. Ask any apoliticial person who is knowledgeable in economy and market. I know a person, the Vice President of a Bank who said "saying that we are not in recession already is like saying Hurricane Katrina only did limited damage." This is his word and he knows the economy and market very well.

Still, you can't scream "recession" based on one month's data. It's too early to tell.

Or it is too late to admit.

[w¡n9Nµ7 §£@¥€r 123]

By definition, you need two quarters (6 months) of gross product contraction before a recession can be positively identified.