In ObamaLand, the recession is practically over. Why, just the other day, Federal Reserve Chairman Ben Bernanke expressed his professional opinion that the end of the recession is upon us, and the economy should be on an upswing by the end of the year.
All that’s really left is to wash the glasses and empty the ashtrays, after which, the U.S. will see the markets surge, housing get a kick-started, and a massive migration of unicorns and rainbows back to the U.S. (Okay, I made up the part about the unicorns and rainbows.) The Washington Post reports:
The U.S. and global economy “appear to be leveling out,” Bernanke told an audience of some of the world’s leading economists and central bankers, and “prospects for a return to growth in the near term appear good.” He warned, however, that the recovery is “likely to be relatively slow at first,” with unemployment declining only gradually.
The idea that the economy is starting to improve was bolstered Friday by a report that sales of existing homes soared 7.2 percent in July to the highest level in two years. Bernanke’s comments and the housing news sent Standard & Poor’s 500-stock index up 1.9 percent to a new high this year.
Bernanke’s speech is long, dull, and boring, and you can read it in its entirety here. It nearly put me to sleep. But the markets loved it. And President Obama loved it so much that he has announced — taking a break from his no doubt much-needed vacation — that he is nominating his man Ben for a second term as Fed Chairman.
But here’s the thing. It ain’t all that.
The federal government also faces exploding deficits and mounting debt over the next decade, far worse than what the Obama administration had estimated just a few months ago.
The revised estimates project that the economy will contract by 2.8 percent this year, more than twice what the White House predicted earlier this year.
Obama economic adviser Christina Romer projected that the economy would expand in 2010, but by 2 percent instead of the 3.2 percent growth the White House predicted in May. By 2011, Romer estimated, the economy would be humming at 3.6 percent growth.
Figures released by the White House budget office foresee a cumulative $9 trillion deficit from 2010-2019, $2 trillion more than the administration estimated in May.
So here we have a vacationing President rewarding the Fed Chair for making such rosy prognostications, all the while the U.S. economy is not only still in the tank, but tanking far worse than Obama’s fair-haired boy predicted just last week.
Hmmm. Can you say “quid pro quo”?
Sure you can. But you’d better say it softly.