Bernanke Tells the Truth: The U.S. is on the Brink of Financial Disaster

[katty]

Tuesday, October 5, 2010

more: http://www.economicpolicyjournal.com/2010/10/bernanke-tells-truth-united-states-is.html

Bernanke Tells the Truth: The United States is on the Brink of Financial Disaster
Yesterday, Federal Reserve Chairman Ben Bernanke delivered a speech before the the Annual Meeting of the Rhode Island Public Expenditure Council in Providence, Rhode Island. In the speech, he warned about the current state of the government finances. His conclusion, the situation is dire and "unsustainable".

It is remarkable that mainstream media has given this speech no coverage. I repeat, the central banker of the United States says in his own words:

Let me return to the issue of longer-term fiscal sustainability. As I have discussed, projections by the CBO and others show future budget deficits and debts rising indefinitely, and at increasing rates. To be sure, projections are to some degree only hypothetical exercises. Almost by definition, unsustainable trajectories of deficits and debts will never actually transpire, because creditors would never be willing to lend to a country in which the fiscal debt relative to the national income is rising without limit. Herbert Stein, a wise economist, once said, "If something cannot go on forever, it will stop."9 One way or the other, fiscal adjustments sufficient to stabilize the federal budget will certainly occur at some point.

[FiveGoodMen]

1. Just more shock and awe

Let's not pretend it was an accident.

[Larry Ogg]

10. Why shouldn't we pretend it was an accident?

Most Americans like to pretend that our predatory Oligarchy is a democracy and that our legalized criminal financial systems don't rob from the poor and give to the rich.

[msongs]

2. 50% reduction in the welfare military will help a lot nt

[NorthCarolina]

9. I would venture to guess that entitlement would fall on the axe well before military expenditures.

[Raster]

11. I would venture to guess that you would be correct.

The Military Industrial Complex will bleed this country-and it's people-dry.

[katty]

13. yup they have over decades and continue to bleed U.S. dry

with unwinable wars, 'interventions' that are in reality occupations, unnecessary military/defense spending, and on and on and on....

[KansDem]

3. Oh, great! AFTER they get the 100s of billions of TARP!

What bad timing! What are the chances of that happening!

[indepat]

4. It's a shame, with 20 years of gipper-inspired voodoo economics being practiced by Republican

administrations since 1981, that no one could see this coming until a Democrat were in the WH, like it just sneaked up on us without any warning whatsoever. Heaven knows taxes can't be raised on the 2% who own most of the nation's wealth, so the people will just have to accept that the only thing BHO can do is gut social security as if we could not see it coming, could not accept/believe what the Cat-food Commission's sole purpose has always been. :shrug:

[Citizen Worker]

14. Make that 30 years and include Clinton and Obama. Trickle up continues unabated and unchallenged.

[Amonester]

5. oh, the more than willing enabler and accomplice of that calamity

talks about how he and his pals in the crime of the millenium plan to finish the(ir) job of impoverishing more than 300 million people and offer no other alternative than a clear path to the mass graves they have paid someone to dig deep since their saint reagan started their demolition spree.

To top it off, nobody in the circus-stream media was present at the startling confession.

Like in shhhhhhhh....

[WestSeattle2]

6. We're painted into a corner - we can't change the rules of

macroeconomics. The only way out of this mess is inflating money to reduce the percentage of debt to income, both on the federal level, but also at the individual level. Consumers aren't consuming; personal bankruptcies continue to climb; real estate remains a basket case - a huge drag on the economy; employer's aren't hiring; public sector employees are losing their jobs by the tens of thousands - compounding the real estate and consumer market train wrecks; and the best that those in power can come up with is printing more money. What else can they do? Unfortunately, by doing that a huge influx of speculative money has flowed into the commodity sector pushing up food prices across the board. The rising cost at the wholesale level as indicated by the CCI and the futures boards, would translate into higher retail prices for consumers, who are already being pinched by stagnant wages and falling net worth. The result – consumers are forced to retreat on spending with the next result – a slowing economy – with the next result – more Quantitative Easing – with the next result – more rising prices as currency induced inflation in essentials rises further compounding the problem as the cycle repeats itself.
As long as the market is convinced that the Fed is going to set off another round of QE, it will go after the Dollar driving it lower, forcing money into commodities making life miserable for a large swath of the American citizenry. I feel for those living on a fixed income - it will be very difficult for them to cope. Inflating money is no short-term fix; it will take years of elevated inflation to achieve what needs to be done.

Also, the actions this past week in a class-action lawsuit filed in Kentucky involving foreclosures has HUGE implications. That will be the next bailout - I'm betting at least one trillion.

People are getting frustrated and fed up, and rightfully so. "Financial Disaster" is an understatement, in my opinion.

[Turbineguy]

7. We know the situation is dire and unsustainable

The whole idea is to fix it.

[txaslftist]

8. Well, since the Fed was largely responsible

for creating this mess, I guess it's only natural that the Fed Chairman would be the one announcing the disaster. It must finally be so obvious that even he can't keep his head in the sand.

[november3rd]

12. Obama needs to go nuclear

What the hell. Everybody knows things are unmentionably risky. The country is broken. So why does Obama keep playing business-as-usual-its-an-election-year?

This is bigger than him or any of us.

10 years in Afghanistan?

1.3 trillion dollar annual budget deficit?

Privatization of schools?

Monsanto?

10% unemployment?

50 million people in poverty?

7% unionization?

Gimme a break. Screw the Republicans.

Raise taxes on everybody--especially the rich and corporations.

Redistribute property--mortgage and debt cancellation.

Take over health care. Take over energy. Put people to work and end the wars.

Today.

[4dsc]

15. Thank a republican for this

Remember to thank a republican for turning our nation into a debtor nation.