Janet Yellen Shames Congress For Austerity, Being Terrible [View all]

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Yellen reminded lawmakers of their sheer terribleness during a Senate Banking Committee hearing on Thursday about her nomination to replace Bernanke as chair of the Federal Reserve when his term ends in January. Republican senators moaned and groaned, as usual, about the Fed's extreme easy-money policies. Yellen reminded everybody that Congress has forced the Fed to act by constantly imposing harsh austerity measures on an economy still recovering from a financial crisis and deep recession.

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"Fiscal policy has been working at cross purposes to monetary policy," Yellen said. "Some of the near-term reductions in spending that we have seen have certainly detracted from the momentum of the economy and from demand, making it harder for the Fed to get the economy moving, making our task more difficult.

"We are worried about a fragile recovery, and a more supportive fiscal policy, or one that at least had less drag, that did no harm, would make life easier," she added later.

Yellen was referring to the austerity that has come out of a rolling series of debt crises instigated by Republicans in the past few years, including the deep budget cuts known as sequestration and this year's payroll-tax increase. Under pressure from Republicans, the federal government has cut spending at the fastest pace since the end of the Vietnam War. Government investment has tumbled to its lowest level as a percentage of GDP since 1948.

This belt-tightening has probably cost the economy nearly 2.5 million jobs, according to a recent study



http://www.huffingtonpost.com/2013/11/14/janet-yellen-congress_n_4275572.html