Only congressional Republicans could make a Republican Federal Reserve chairman, first appointed by George W. Bush, sound like a center-left Democrat.
Sounding a bit like a broken record, Ben Bernanke once again urged lawmakers to not put the recovery at risk as they focus on slashing government spending over the long haul.
While the Federal Reserve Chairman’s comments were nothing new, they seemed perfectly timed to coincide with the first meeting of the 12-member bipartisan debt super committee Thursday.
“While prompt and decisive action to put the federal government’s finances on a sustainable trajectory is urgently needed, fiscal policymakers should not, as a consequence, disregard the fragility of the economic recovery,” Bernanke said in a speech in Minneapolis.
He added today, “In the absence of adequate demand from the private sector, a substantial fiscal consolidation in the shorter term could add to the headwinds facing economic growth and hiring.”
Psst, Republicans, I think he’s talking to you.
Bernanke didn’t break new ground, necessarily, but he did remind everyone that while it would be responsible to pursue long-term debt reduction, cutting government spending in the short term would undermine the economy.
“Fortunately, the two goals — achieving fiscal sustainability … and avoiding creation of fiscal headwinds for the recovery — are not incompatible,” he said.
If this all seems rather familiar, there’s a good reason for that. Bernanke has steadily been pleading with policymakers not to adopt congressional Republicans’ agenda.
In July, the Fed chairman told Congress that “sharp and excessive cuts in the very short term would be potentially damaging to that recovery.” In August, Bernanke not-so-subtly urged Congress to adopt a short-term stimulus to give the economy a boost.
And now he’s making the same case again today.
Taken together, we see the Federal Reserve, the CBO, economists, the financial industry, the bond market, and business leaders all saying more or less the same thing: don’t approve drastic spending cuts, do approve short-term stimulus.