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Bernanke warns Congress – but ‘do-something side, is facing do-nothing side’

Editor’s Note – Stand Up America’s mission is to provide new information that is not readily found elsewhere, to offer analysis of information from all stripes, and occasionally we bring a story that simply must be exposed for its incredibility. John Schoen, a Senior Producer and economics commentator at MSNBC is just such an example.

We would like to think that the country can already see that NBC and its subsidiary; MSNBC are mere shills for the current Administration as is Media Matters and many other groups on line and in the everyday media of print and television, but sadly we know this is not true yet. But here, the message is clear, its Congress’s fault. 

Of course, when Schoen writes the word Congress, it is a thinly veiled reference to the Republicans, and worse, the Tea Party caucus. They are the ones mucking up the works and preventing a recovery of the economy, and the creation of jobs.

The problem is, he leaves many facets out of the equation, on purpose, all meant to make the leftist base very mad, and to keep the rest of America woefully uninformed, and truly mis-guided. Its complete and utter trash.

Ben Bernanke comes to Congress with a grave warning, and the left just jumps on that doom and gloom message and blames the other side. Schoen isn’t doing any heavy lifting here, he is merely parroting the party line. But the title says it all: “Congress Steering the US Economy…” No mention of Obama, its all Congress’s fault.

Schoen never once mentions the lack of Senate action, but certainly points out the so-called “brinksmanship” we all know to mean the Republicans, yet it was Obama who reneged, again, a missing piece.

Once again, the left wants the reader to look at Congress as if it is a monolithic being. With an approval rating below that of Obama, its a card well-played to the ignorant. Make those bad Congressman all look the same – “Do-Nothings” – even though one of those houses is Democrat Party controlled. Obama and his party are willing to take the heat of setting up this straw-man, all for the greater goal of re-election for Obama.

They do not want you looking behind the curtain…its a very successful ploy, oft used, and the numbers show it. Blame the Republicans, Ryan, and now Romney for not compromising…even when its the White House and the Democrats who are the guilty parties in the “Do-Nothing” ploy, and the uncompromising tactics. Blame is more powerful than fact. A brief analysis follows:

Control – We begin with a brief history, again, of the make-up of Congress. There are two houses, the Senate and the House of Representatives. The new majority in control are the Republicans, since January 2011. Prior to that, the Democrats, 2006 – 2010. The Senate is still controlled by the Democrat Party. For the first two years, Obama enjoyed his party’s control of both houses, losing the House in the 2010 landslide reversal. Yet, no budgets.

Process – All spending bills begin in the House, and then must pass the Senate before the bill goes to the President for a signature or a veto. Both houses draft their own budget mark-ups, with the President’s suggested budget in hand. Long story short – The House has passed the Ryan Budget, but the Senate has not had a budget in three years, over 1,090 days. The President’s budget was not even brought to the floor of the Senate for a vote…and the last one actually voted upon lost 0 – 100, in the Democrat Party controlled body.

Compromise – So, the operative word becomes compromise, with a new political definition. The White House offers a completely ridiculous budget, while the House tackled the issues and passed Ryan’s version. The word from the White House: attack the Ryan Budget, scream lack of compromise. The true meaning of that accusation is that they know they are not going to get there huge spending bill through, so demagogue, and employ a scorched earth policy.

“Taxmageddon” – Bernanke is correct, on January 1, 2013, all those tax cuts go dark, and revert to original levels. They demagogued the Bush Tax Cuts when created, but inaction means the cuts are going away. Now its blame the Republicans for the tax cuts “sun-setting”. Now the tax-cuts are good? Which side of their mouth do we listen to?

Conclusion – Schoen knows all this, and he also knows that in this election season, the Democrats are the ones who will do-nothing, all the while blaming the other side with totally dishonest demagoguery. Sinking the economy is less important than re-electing Obama and themselves, by keeping the ignorant fully lost, the base ginned up like drunken sailors, and the MSM goes along for the ride, fully blowing their hot air into the Obama 2012 Campaign sails.

He knows Congress, the do-something side, is facing the do-nothing side, knowing the do-nothings will win, because that is the only way Obama can get re-elected. Wake up America, Obama’s ship is heading us all over the cliff – “Taxmageddon”!

Scheon closes with this plea: “What do you think of the “fiscal cliff”?” Let us know on Facebook.

Congress steering US economy toward a ‘fiscal cliff’

By John W. Schoen, Senior Producer – MSNBC Economy Watch

Fed Chairman Ben Bernanke calls it the “fiscal cliff.” It might be better thought of as the next economic Armageddon.

Unless Congress acts to soften the blow, economists are warning that a looming year-end collision of massive, “automatic” cuts in federal spending and the expiration of sweeping Bush-era tax cuts could crush an already weak U.S. economic recovery.

And unlike the central bank’s response to the Panic of 2008, the Fed would be powerless to offset the catastrophic impact on the economy and financial markets.

“There is absolutely no chance that the Federal Reserve would be able to have the ability whatsoever to offset that effect on the economy,” Bernanke told reporters Wednesday, following a two-day meeting of the Fed’s policy-making committee.

The risk of a potential economic train wreck stems from a series of contentious political decisions that Congress has been ducking for years, postponing a long list of tough choices until the end of the year, until after the national elections.

Now, unless a compromise is reached, sharp cuts in federal spending will remove hundreds of billions of dollars from the U.S. economy, virtually overnight. At the same time, American consumers will see a massive increase in taxes that will sharply curb their spending power, taking another big bite out of the economy.

While it was ducking those big decisions, Congress has also punted on a series of smaller budget measures that will have to be decided by next year. Taken together, they add up to some big numbers.

The lists includes two long-running budget items that have become a popular perennial target of political horse trading. One is the now-annual “fix” to scheduled cuts in Medicare payments that would reduce spending on doctors’ fees by as much as 30 percent. The other is a so-called “patch” required to prevent the Alternative Minimum Tax from hitting an ever-wider swath of middle class households.

Wage earners are also set to lose the payroll tax cut that expires at the end of this year. An extension of long-term unemployment benefits is also set to expire, which would further slash the amount of money flowing through the economy.

Economists and budget analysts have offered up various estimates on just how badly the economy would be damaged if Congress fails to act in time. The combination of the tax increases and spending cuts would amount to more than $6.8 trillion over 10 years, according to the Committee for a Responsible Federal Budget, a non-partisan think-tank whose board includes former members of Congress and budget directors.

The Congressional Budget Office predicted earlier this year that the full impact of those tax hikes and spending cuts would remove about 3.5 percent of gross domestic product, more than wiping out the current recovery. That would send the unemployment rate, which stood at 8.2 percent in March, to 8.9 percent by year-end and 9.2 percent at the end of 2013.

Some economists argue the hit to GDP could be even greater.  Morgan Stanley economist David Greenlaw figures the hit from the fiscal cliff would amount to more like 5 percent of GDP in 2013.

Others, like Deutsche Bank economist Joseph LaVorgna, think those estimates are overblown, though his assessment assumes Congress gets its act together and steers away from the cliff at the last minute.

But there’s widespread agreement that if lawmakers ultimately pull a “Thelma and Louise,” the economic impact of these tax and spending changes would be devastating if they hit all at once.

As Congress quibbles bitterly over how to cut the federal deficit, lawmakers generally agree that failing to do so would have dire long-term consequences. But, as Bernanke told the House Oversight Committee in March, balancing the budget abruptly would be even worse.

“It is important to achieve sustainability over a longer period,” he told the panel. “One day is a pretty short time frame.”

Perhaps even more worrisome than the scheduled “cliff” in federal taxing and spending is the timetable lawmakers face to prevent the worst-case scenarios from playing out. Given the potential changes in party leadership for both Congress and the White House, chances appear slim to none that any decisions will be made until after the November elections. That leaves Congress and the White House roughly eight weeks – punctuated by the Thanksgiving, Christmas and New Year’s Eve holidays – to prevent the economy from falling off the cliff both sides have created.

The deadline could be even tougher to meet if, as some are warning, the government runs out of borrowing authority in the middle of that eight-week window.

Though the exact timing is difficult to predict, the next expiration of the current debt ceiling will likely spark another round of brinksmanship reminiscent of last August, when Congress and the White House narrowly quelled a rebellion by House Republicans bent on forcing the U.S. Treasury to default on its debt. That compromise produced the “automatic” $1.2 trillion spending cuts set for early next year. 

Finding a clever way to kick the can down the road again is becoming a bigger and bigger challenge,” Princeton University economist Alan Blinder wrote in a recent Wall Street Journal OpEd. “And Congress has barely coped with previous such challenges.”

What do you think of the “fiscal cliff”?

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Posted by on April 30, 2012. Filed under Economy. You can follow any responses to this entry through the RSS 2.0. You can skip to the end and leave a response. Pinging is currently not allowed.

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