From Ben Bernanke, speaking at the International Monetary Conference in Atlanta today:
If the nation is to have a healthy economic future, policymakers urgently need to put the federal government’s finances on a sustainable trajectory. But, on the other hand, a sharp fiscal consolidation focused on the very near term could be self-defeating if it were to undercut the still-fragile recovery….By taking decisions today that lead to fiscal consolidation over a longer horizon, policymakers can avoid a sudden fiscal contraction that could put the recovery at risk.
Translation: Don’t cut federal spending, idiots. Cut it in the future.
Further translation: The economy is fragile, but we at the Fed aren’t going to do anything about it. And I guess Congress isn’t going to do anything about it either. But for God’s sake, at least limit yourselves to doing nothing. Actively slashing spending is almost too stupid to bear thinking about.
Alan Greenspan and Ben Bernanke, the conservative Republicans who have run the Fed for the past 24 years, have now both gone on record telling their fellow conservative Republicans to back away from the cliff and stop being idiots. It’s a sign of what’s happened to the GOP that these warnings have had no visible effect other than to make them apostates to be maligned in stump speeches.