There was good economic news today. According to the Wall Street Journal, Fed Chairman Ben Bernanke, in what is likely the last press conference of his tenure, announced the economy is strong enough that the Fed decided at its last meeting to scale back its monthly stimulus of bond-buying from $85 to $65 billion a month. With manufacturing, construction, home and auto sales all up, it was determined that the program of "quantitative easing" could itself be eased. The New york Stock Exchange responded with a jump on the Dow of 292 points today to a new record high of 16,167.
Interest rates will be kept low for at least another year to keep big-ticket purchases affordable and continue to work on the unemployment rate, which is projected to drop about 10% next year, from the current 7% down to 6.3% in 2014.
There is no question the budget austerity imposed by Republicans on Capitol Hill has delayed and reduced the recovery. Bernanke, a Bush appointee, attributes "fiscal drag," the slashing of government jobs and spending during a downturn, to shaving about 1.5% off U.S. economic growth this year. 2013's decent growth of 2.3% could have been a robust 3.8% without the ideological foolishness of sequesters, shutdowns and layoffs during hard times.
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