The United States is embroiled in its own financial troubles and that situation is aggravated by serious concerns that the European crisis may damage the economy even more. Yet, according to the Washington Post, there is little that the nation's top financial officials — Treasury Secretary Timothy Geithner and Federal Reserve Chief Ben Bernanke — can do about it because they have few tools left.
“The men, battle-hardened and more experienced, now have little more than the power of persuasion,” the Washington Post reports.
“Geithner organized the massive and unpopular bailout that helped stem a rapid financial decline,” the Post reports. Now, his options are constrained by gridlock in Congress. Any fresh proposals to invigorate the economy would face Republican skepticism.”
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USA Today also points to Congress' vote to trim $2.1 trillion from the federal deficit. With increased government spending largely sidelined as a result of the debt-ceiling debate, there's little cushion for the economy if it slips again into a recession, the Post reports.
Bernanke has been pushing the Fed to take a series of steps over the past three years to spur economic growth. But, he has exhausted the Fed's usual tools, the Post reports.
“The central bank has gone to extraordinary lengths to spur growth, cutting short-term interest rates to nearly zero, putting shaky mortgages on its balance sheet, and buying hundreds of billions' worth of Treasury bonds,” says USA Today.
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Now, according to the Washington Post, Bernanke is facing new opposition from members of the Fed’s policy making committee who are worried about the risk of inflation or new financial bubbles.
And, what about the head of the nation, President Obama? What can he do in the face of mounting turmoil? It appears that his position may be even worse since in addition to economic troubles, he must also think about winning a second term. The Washington Post says Obama's options are limited by politics.
“Back in ’08, we were able to do things on the fiscal side which were interventionist and aggressive, Neel Kashkari, a top executive of Pimco and former top adviser to both Paulson and Geithner said in the Washington Post.
“One of the big advantages we had was that President Bush wasn’t running for reelection, so we could do things that were deeply unpopular but we knew were the right thing.”
Editor's Note: Exposed: You Deserve to Know What Obama and Bernanke Are Hiding From Americans
Click here to watch this gripping Newsmax investigative report that reveals the truth about America's economic future and the disastrous path that Obama’s and Bernanke’s reckless policies are taking us down.
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