Ben Bernanke gave the last of his four lectures at George Washington University. He pointed out that US GDP has risen by about 3% a year over the last one hundred. He predicted growth could return to that level again.
Bernanke did point out two reasons that the recovery could be very long to take hold. The first is housing prices which continue to fall. This causes an ongoing drop in consumer net worth and thus consumer spending. A lack of small business expansion is the other prime reason. Banks still believe loans to most of them are risky due to a spotty recovery and a lack of assets to guarantee loans.
N0w, Bernanke returns to the Federal Reserve to contemplate whether there is anything else he can do to perserve the moderate expansion. He continues in a battle with some of the other governors over whether it is prudent to keep interest rates near zero or whether the action will cause inflation. And, he will continue to say, whether people will listen or not, that the budget deficit and national debt are ticking time bombs that Congress has to deal with now.
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