The Norman Transcript

Headlines

November 21, 2012

Bernanke warns Congress to avoid ‘fiscal cliff’

WASHINGTON — Federal Reserve Chairman Ben Bernanke on Tuesday urged Congress and the Obama administration to strike a budget deal to avert tax increases and spending cuts that could trigger a recession next year.

Without a deal, the measures known as the “fiscal cliff” will take effect in January.

Bernanke also said Congress must raise the federal debt limit to prevent the government from defaulting on Treasurys debt. Failure to do so would impose heavy costs on the economy, he said. Bernanke said Congress also needs to reduce the federal debt over the long run to ensure economic growth and stability.

Uncertainty about all these issues is likely holding back spending and investment and troubling investors, the Fed chairman said in a speech to the Economic Club of New York.

Resolving the fiscal crisis would prevent a sudden and severe shock to the economy, help reduce unemployment and strengthen growth, he said. That could make the new year “a very good one for the American economy,” he said.

“A stronger economy will, in turn, reduce the deficit and contribute to achieving long-term fiscal sustainability,” Bernanke told the group.

When asked during a question and answer session after the speech whether the Fed could soften the impact of the fiscal cliff, Bernanke was firm in his warning.

“In the worst-case scenario where the economy goes off the broad fiscal cliff ... I don’t think the Fed has the tools to offset that,” Bernanke said.

Bernanke also said the severity of the Great Recession may have reduced the U.S. economy’s potential growth rate. He didn’t say by how much or how long slower-than-normal growth might persist.

Over the long run, the U.S. economy has grown an average of about 2.5 percent each year. Economists predict growth in the July-September quarter will be revised up to an annual rate of around 3 percent, above the government’s initial 2 percent estimate. But they think the economy is slowing to an annual growth rate below 2 percent in the October-December quarter — too slow to make much of a dent in unemployment.

Text Only | Photo Reprints
Headlines
  • Oklahoma City Memorial Bombing museum gets tech boost

    OKLAHOMA CITY — A memorial and museum built to remember the worst act of domestic terrorism on American soil is in the midst of a $7 million upgrade so it can better portray how different the world was when Timothy McVeigh blew up the ...

    April 19, 2014 1 Photo

  • Is Okla. backing off accountability?

    One by one, K-12 education reforms passed in previous years by Oklahoma lawmakers are being targeted for weakening or repeal....

    April 19, 2014

  • Hope Trunk travels to Norman

    The rustle of paper could be heard as students meticulously folded one crane, then another and another Friday afternoon. After reading the inspiring story, “Sadako and the Thousand Paper Cranes,” Cleveland Elementary School fifth graders ...

    April 19, 2014

  • Congressman Cole reflects on recovery

    Congressman Tom Cole’s home in Moore was not hit by the May 20 tornado but it came pretty close. His wife has made it clear she wants a saferoom, he said. In a visit to the Transcript on Friday afternoon, Cole talked about tornado ...

    April 19, 2014

  • Gaylord to get $35,000 grant for poverty project

    A team from Gaylord College is among the first winners in a national competition to fund innovative news experiments that serve communities, the Online News Association has announced....

    April 19, 2014

  • U.S. puts off pipeline decision

    WASHINGTON — The Obama administration is putting off its decision on the Keystone XL oil pipeline, likely until after the November elections, by extending its review of the controversial project indefinitely....

    April 19, 2014

  • Garage sale to benefit Team Jamie’s Crew set

    A garage sale to benefit Team Jamie’s Crew will start at 9 a.m. today at 1510 Melrose Drive....

    April 19, 2014

  • Sonic plans expansion

    OKLAHOMA CITY — Oklahoma-based Sonic Corp. plans to open 1,000 new drive-in restaurants nationwide over the next 10 years, expanding the chain by about 30 percent, the company said....

    April 19, 2014

  • Singing Sooners show set

    The University of Oklahoma School of Music presents the Singing Sooners Spring Show at 8 p.m. Friday, April 25 in the Sharp Concert Hall, Catlett Music Center. Jim Graves and Stephen Ziegler serve as directors for the group....

    April 19, 2014

  • Study: Half of jailed youths have injury

    NEW YORK — About half of all 16- to 18-year-olds coming into New York City’s jails say they had a traumatic brain injury before being incarcerated, most caused by assaults, according to a new study that’s the latest in a growing body of ...

    April 19, 2014