deficits to continue breaking records

[Danzig]

now, this is interesting:

http://www.newsmax.com/Headline/bern...7/22/id/365426

Bernanke Urges Congress to Renew Bush Tax Cuts

Thursday, 22 Jul 2010 08:13 PM
By: David A. Patten

Federal Reserve Chairman Ben Bernanke dropped a major bombshell on Democrats seeking massive new revenues to narrow the deficit, announcing Thursday that he favors preserving the Bush administration tax cuts to help a faltering U.S. economy.

“In the short term I would believe that we ought to maintain a reasonable degree of fiscal support, stimulus for the economy,” Bernanke told the House Financial Services Committee. “There are many ways to do that. This is one way.”

Bernanke's statement put him directly at odds with White House officials and House Speaker Nancy Pelosi, who favor raising taxes on wealthy Americans by letting the tax cuts the Bush administration passed in 2001 and 2003 expire.

Bernanke's views also conflict with those of his predecessor, Alan Greenspan, who told Bloomberg TV's Judy Woodruff just last week that lawmakers should allow the Bush tax cuts to expire as scheduled at year's end.

Greenspan conceded, however, that doing so probably would slow growth.

Bernanke emphasized the importance of giving the economy a boost. But he also told the House committee that dealing with the deficit, which has ballooned during the Obama administration, remains a major consideration.

“We need to be taking steps to reassure the American people and the markets that our fiscal situation is going to be well controlled,” Bernanke said. “That means that, if you extend the tax cuts, you need to find other ways to offset them.”

Bernanke's comments came on a day when the Dow Jones Industrial Average jumped 201 points, in part on reports of strong corporate profits.

But the markets were also encouraged by the news that two more Senate Democrats — Sen. Kent Conrad, D-N.D., and Sen. Ben Nelson, D-Neb. — are joining the growing number of voices urging an extension of the tax breaks enacted under the Bush administration to stave off the possibility of a double-dip recession.