Economic Woes just won't go away…..
- Federal Reserve Chairman Ben Bernanke sketched a bleak picture of the U.S. economy Tuesday — and warned it will darken further if Congress doesn't reach agreement soon to avert a budget crisis.
- Without an agreement, tax increases and deep spending cuts would take effect at year's end. Bernanke noted what the Congressional Budget Office has warned: A recession would occur, and 1.25 million fewer jobs would be created in 2013.
- The Fed is prepared to take further action to try to help the economy if unemployment stays high, he said. Bernanke didn't signal what steps the Fed might take or whether any action was imminent. And he noted there's only so much the Fed can do.
- Fed chairman made clear his most urgent concern is what would happen to the economy if Congress can't resolve its budget impasse before the year ends.
- Cuts in taxes on income, dividends and capital gains would expire. So would this year's Social Security tax cut and businesses tax reductions. Defense and domestic programs would be slashed. And emergency benefits for the long-term unemployed would run out.
- All that "would greatly delay the recovery that we're hoping to facilitate," Bernanke said near the end of two hours of testimony to the Senate Banking Committee.
- Bernanke noted that the economy, after growing at a 2.5 percent annual rate in the second half of 2011, slowed to roughly 2 percent from January through March. And it likely weakened further in the April-June period.
- Congress needs to resolve its impasse well before the year ends, Bernanke said. "Doing so would help reduce uncertainty and boost household and business confidence,"
- The cuts that would kick in next year could cost as many as 2 million jobs, a trade group that represents manufacturers said in a report released Tuesday. The report came from the Aerospace
How do we get out of this?