After Friday’s much anticipated speech by U.S. Federal Reserve Chairman, Ben Bernanke, economic leaders on both sides of the Atlantic are calling on political leaders to urgently tackle the economic problems faced both by Europe and the United States. Along with Bernanke, International Monetary Fund Chief Christine Lagarde is urging political leaders to act now or face an even deeper ensuing crisis in the near future.
After Friday’s speech in Jackson Hole, WY, many analysts are left scratching their heads and wondering if the Federal Reserve has run out of tricks.
Bernanke urged Congress to battle the long term unemployment problem the U.S. has been facing. He also threw down the gauntlet to Congress for them to do their jobs and stop the bickering in Washington. “The Fed is simply saying, ‘We are monitoring the situation very carefully but would encourage the government, both parties, to get their act together and pass a long-term fiscal strengthening package and then perhaps short-term stimulus.
In the United States, the political stalemate in Washington, D.C. has derailed moves to get massive budget deficits in check. This has brought the U.S. to the edge of default and has costs the U.S. its coveted AAA credit rating by Standard and Poor’s.
Europe’s leaders are fighting over who should soak up the sovereign debt crisis in the euro zone. The euro zone countries run their own budget policies although they are unified under monetary policy.
On Saturday, President Barack Obama spoke with German Chancellor Angela Merkel. The White House put out a statement saying the two leaders have vowed to act to shore up a global recovery that now looks like it is at great risk. President Obama is preparing for a speech to the nation after the September 5 Labor Day holiday. It is expected that he will lay out a plan to tackle the continued unemployment situation the U.S. faces.