Excerpted from WSJ-- Mean Street: Bernanke Tells Krugman to Shove It
It took Charles Djou, the new Republican Congressman from Hawaii, to put it bluntly to Bernanke. Should there be “additional fiscal stimulus?”
And Bernanke answered as bluntly as a Fed Chairman ever will, “If you (Congress) decide to do more fiscal stimulus, then it would be very helpful to combine that with a plan for a fiscal exit strategy.”
Everyone in that hearing room got the joke. Congress not only has no plan for a fiscal exit strategy. It can’t even be trusted to come up with one. That’s why we now have a presidential bipartisan debt commission.
In effect, Bernanke was saying “Read my lips. No more stimulus.”
Krugman may consider Bernanke’s skepticism on the stimulus insane. Just as he may consider the market’s obsession with deficits overwrought. But in the end, the markets get what the markets want. Just ask the Greeks. And the Hungarians. And the Brits.
By the end of Bernanke’s stimulus-stomping testimony, the Dow was up 115 points.
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