With another set of storm clouds looming and the economy ready to tank and take the asset markets with it,
the Republican congress and the Democratic senate now oweit to the economy to close ranks and find a way to keep the recovery going. The Fed seems to be taking a pause at a dangerous time.
The move downwards in the housing market is clearly a danger as it could mean further bailouts may be required for banks, munis and Fannie and Freddie. It is important for the
President to push for more stimulus possibly through a second ARRA package that is aimed at providing a
backstop to munis. If there are funds left from the first package this is the time to spend it.. A wave of failures now could leave the economy facing fresh problems. Investments in Energy infrastructure and a gradual reduction in a few of the medicare benefits are in order. It is important for the president to send a proposal to Congress that can resolve the present crisis and keep the recovery on track. Postponing the compromise will not work. The same is true for the congress, if they were really concerned about the deficit they should not fight an idealogical fight right now.
Bonyer should understand that giving Newt or Mitt a realistic chance is not his job. If the recovery stalls it is his job that will also be on block.
With the recovery well under way, they could go back to the drawing board. But a hard landing could prove really expensive. Austerity works when the economy is well heated. Presently its important to continue the process of derisking the economy through jobs and improved balance sheets.
Its Triple witching hour, this is the time to pull all the stops - not be the full stop. A weak recovery could come to a roaring halt. OPEC is not cooperating so Congress and the Senate must agree to go forward.
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