US economy is finally coming out of recession and one of the worst financial crisis since the economy meltdown. This was declared recently by Ben Bernanke, Chairman of Federal Reserve. Bernanke added that situation is improving in rest of the world too including US.
Bernanke stressed that despite much progress in stabilizing financial markets and trying to bust through credit clogs, consumers and businesses are still having trouble getting loans. The situation is not back to normal, he said. Restoring the free flow of credit is a critical component to a lasting recovery.
“Although we have avoided the worst, difficult challenges still lie ahead,” Bernanke told the gathering. “We must work together to build on the gains already made to secure a sustained economic recovery.” The remark made by Fed chief’s is crucial as it two years after the financial crisis broke out and about one year after it showed its effect across US.
The creation of $787 billion stimulus package by Obama Administration to help the companies and financial institution will also not bear much fruit even after 6 months which resulted in becoming an unpopular and cause of further aggravation to the American’s. Critics have argued that the Wall Street bailouts in particular sent a message that companies that take reckless gambles will be rescued by the government. There’s also the concern that the rescues put taxpayer’s dollars at risk. We all aware about the case of Capitol Hill which has used the bail-out package to give hefty bonuses to employees of the very division which is responsible for its loss. The $700 billion taxpayer-funded bailout program used to prop up banks, AIG, General Motors, Chrysler and other companies also drew criticism from the public and politicians. However, the efforts to fight the Recession are commendable unlike the recession of 1930.
Bernanke asserts for the need of stricter scrutiny of the companies like AIG.
We welcome such views as it is in the interest of American Tax-payers. Sudden collapse of Lehman Brothers jolted the entire financial sector and added more fuel to recession. Hence, the constant check in any form will be beneficial to US economy and public at large.