Saturday, September 25, 2010
Bernanke Says Economy Recovering More Slowly Than Policy Makers Would Like
The recovery from the financial crisis is growing the US economy at a slower pace than policy makers hoped, despite the $1 trillion in bond purchases and reduced interest rates. The treasury plans to purchase more bonds this year. The sluggish growth, a 1.6 percent annual rate in the second quarter, has kept unemployment at 9 percent in every month this year. Inflation rose at a 1.4% rate in July. According to Ben Bernanke, new regulations should reduce the risk of future financial crises. Based on some of the articles I’ve read, I question the government’s bond purchases. It seems we are at a time when we need to increase our savings/investments. Should we allow interests rates to rise to encourage more saving?
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ReplyDeleteI think because companies are still feeling the effects of the financial crisis, companies are not able to start hiring as many people as what is needed to lower the unemployment rate at a faster rate. Enforcing new policies and making new regulations to prevent future financial crises and to help our economy recover is all we can do right now. Even though it is recovering more slowly than policy makers would like, at least it is recovering even if its not as fast as they would like. I think the more time spent in recovery the faster the rate of recovery will grow and it will eventually recover quicker than the rate at which it is recovering now. Slow and steady wins the race, doing too much at once may actually backfire. As the unemployment rate slowly decreases, people will start purchasing again.
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