Fed News Friday!

Bernanke is asking for Congress to begin structuring a plan for his $600 billion dollar “donation” to the economy.  The Federal Reserve is not allowed to participate in partisanship, thus policy is not their forte, although these comments from Bernanke in the past may make you think differently:

• June 9, before the House Committee on the Budget: “Achieving long-term fiscal sustainability will be difficult. But unless we as a nation make a strong commitment to fiscal responsibility, in the longer run, we will have neither financial stability nor healthy economic growth.” And he went on: “Right now I don’t think is the time — this very moment is not the time — to radically reduce our spending or raise our taxes because the economy is still in recovery mode and needs that support.” Fiscal stimulus, he said, is necessary. “I think, you know, right now we have a broadly stimulative fiscal policy which, at the moment, is helping, is needed, that includes lower taxes and probably higher spending as well.”
• July 21, before the Senate Banking Committee: “At the current moment the large deficits, as unattractive as they are, are important for supporting economic activity.”
• July 22, before the House Financial Services Committee: “More generally, certainly both the Fed, the Treasury, the Congress and everyone should try to focus on growth-oriented policies. It’s important to take steps, including control the fiscal deficit, that will support longer-term growth, which will increase confidence in the present, and to do what we can to reduce uncertainty, about policies and about the economy. … [I]n general, as I said, I think that maintaining the current level of fiscal support is important because the economy is still quite weak.”
• April 7, Dallas, Tex.: “Indeed, a credible plan that demonstrated a commitment to achieving long-run fiscal sustainability could lead to lower interest rates and more rapid growth in the near term.”
• April 14, before the Joint Economic Committee: “In other words, addressing the country’s fiscal problems will require difficult choices, but postponing them will only make them more difficult.”
• April 27, at the National Commission on Fiscal Responsibility and Reform: “Thus, the reality is that the Congress, the Administration, and the American people will have to choose among making modifications to entitlement programs such as Medicare and Social Security, restraining federal spending on everything else, accepting higher taxes, or some combination thereof. “
• August 2, Charleston, S.C.: “Thus, state governments may wish to revisit their criteria for accumulating fiscal reserves. Building a rainy-day fund during good times may not be politically popular, but it can pay off during the bad times.” He continued, “The states have the opportunity to serve as role models for effective long-term fiscal planning.”
• October 4, Providence, R.I.: “What we do know, however, is that the threat to our economy is real and growing, which should be sufficient reason for fiscal policy makers to put in place a credible plan for bringing deficits down to sustainable levels over the medium term.”