The Commerce Department downgraded economic growth to 1.6 percent today, from an expected 2.4%, confirming significant momentum loss and raising job loss fears.
The Federal Reserve Chairman, Ben Bernanke, said the Fed will consider making another large-scale purchase of securities if the slowing economy deteriorates significantly and if signs of deflation show. He offered extensive thoughts on how to pull the U.S. economy out of a deepening slump, despite fears growing that there could be a lapse back into a double-dip recession. He concluded that the economic outlook is "inherently uncertain" and "remains vulnerable to unexpected developments."
After all was said and done though, he said he believed that 2011 would be better than most economic forecasters predict and seemed quite positive about next year.
Now, I would expect someone in Bernanke's position to put a positive spin on things, because above all he wants to see the U.S. economy grow and relieve the humongous pressure the Fed's been facing for several years.
Yet, the figures simply don't support his upbeat position. Unemployment continues to stay at the worst levels it's been at...month after month. Exports are down, big business continues to conserve capital refusing to spend, banks still won't lend at all, small businesses are being strangled by rising taxes, the Bush tax cuts are likely to be repealed, damaging small business further. Health care implementation is increasing all business overhead significantly, and government continues to burn taxpayers money without rhyme or reason under the guise of "stimulating" an "economic recovery" that doesn't exist.
So what is it that Bernanke sees that could possibly turn all these disasters around and change the tide of things in 2011? Well, he didn't say or hint it, but, there's only one thing that could possibly help, and Bernanke evidently thinks it will happen. Come this November he likely expects a Republican landslide, and regardless of anything else, that will be good for business. And then, if the adage is true that nations run on their pocketbooks, maybe we've still got a prayer.
That's it for today folks.
Adios
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