Some really troubling stories today about the economy. One explains how we got here. Another bodes ill for where we're going. First, there's the terrific WaPo piece exploring Treasury Sec. Tim Geithner's prioritization of debt over jobs from even before the inauguration, including his condescending claim that stimulus spending is "sugar." Unfortunately, Pres. Obama seems to have bought into Geithner's Wall St. perspective -- which would explain why the White House isn't even fighting a rhetorical battle for spending that would create jobs (and, of course, reduce the deficit by increasing tax revenues).
And so, we have a White House that is now committed to doing nothing except clinging to hope that the economy will improve. And here's my question for Fed Chair Ben Bernanke:
He says there should be no immediate cutting, because it would hurt the economy. Yet he also says there should be no further stimulus for the economy. So no cuts, but no increases. Is he actually claiming that the federal budget right now just happens to be at exactly the perfect level to stimulate job creation? What are the odds of that? Or is it more likely that Bernanke knows full well that, since cuts are bad, more spending would be good -- but he just chooses not to say so out of political cowardice?
What do you think?
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