Want to know what’s happening on the Federal stimulus front? So does everyone else. And Bernanke’s not working overtime to answer questions. Instead, he spent much of his time in front of the Joint Economic Committee leaning hard into U.S. congress, calling their procedures muddled and their goals incoherent. Mark Felsenthal, an economic correspondent for Reuters, gives an account of Bernanke’s tone:
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“He’s normally pretty respectful but this time he said he thought it was amazing that Congress could spend $5, raise $3 and not fully commit to borrowing the other $2. When asked to compare the United States to Greece, he said one difference was that the United States sort of has this stellar record over the years for paying its debt back, but it could put that at risk if it had another damaging debate about the debt ceiling.”
At the heart of Bernanke’s criticism, it seems, is what he perceives as an overreliance on monetary policy rather than the use of appropriate legislative action on the part of Congress:
“But I do want to say, and I’ve said this before, that monetary policy is not a panacea. It would be much better to have a broad based policy effort addressing a whole variety of issues. I will leave the details to congress, who has considered many of these issues. So I would be much more comfortable if in fact Congress would take some of this burden from us and address those issues.”
With troubles brewing ever hotter in the eurozone, and the U.S. economy feeling the heat, Congress and the Fed are both going to have some serious burdens to bear in the coming months. Whether they coordinate effectively may mean the difference between continued recovery or return to recession.