It’s a continued slow pace of recovery for the U.S. economy, Federal Reserve Chairman Ben Bernanke said in testimony today before the House Financial Services Committee. MarketWatch reports:
At the moment, Fed officials see a recovery that “will likely remain moderate,” Bernanke said, with the unemployment rate falling “only gradually.” Inflation is expected to subside in coming months, he said.
Fed officials have forecast that the economy will expand at around a 3.5% rate over the next 18 months and Bernanke said this remained the forecast.
Bernanke also reiterated a line that has become a White House talking point of late—that the soft economy can be chalked up to factors outside the Administration’s control (President Obama called them “bumps on the road to recovery.”) Here’s how Bernanke described those conditions:
In part, the recent weaker-than-expected economic performance appears to have been the result of several factors that are likely to be temporary. Notably, the run-up in prices of energy, especially gasoline, and food has reduced consumer purchasing power. In addition, the supply chain disruptions that occurred following the earthquake in Japan caused U.S. motor vehicle producers to sharply curtail assemblies and limited the availability of some models.
But that’s not the whole story. The Heritage Foundation’s Bill Beach explains that the U.S. economy is capable of much faster growth, and it’s being dragged down by Obama Administration policies, including increased taxes and costs under Obamacare, EPA-induced energy cost increases, and the threat of additional taxes and inflation:
Based on our talents, resources, and capital structure, the economy should be growing now at four to five percent. That growth rate would produce over 250,000 jobs per month…enough to reduce the unemployment rate. Instead, we have a huge output gap: the economy can barely make a 2 percent growth rate, and that translates into fewer jobs per month than we need just to keep up with normal growth in our population.
Given how smart and educated Americans tend to be, how entrepreneurial and innovative a people we have in this country; there’s little reason why we shouldn’t be growing like gang busters. Sometimes politicians blame the people for not working hard enough or making job-creating investments. However, workers and business owners aren’t holding the economy back. Rather, it’s government policies.
Those fears over government policies were confirmed in a new survey conducted on behalf of the U.S. Chamber of Commerce. The survey showed that small businesses rank the threat of regulation and taxes as the two biggest threats coming out of Washington, while while economic uncertainty, America’s growing debt and deficit and Obamacare score as top challenges.