EconomicCrisis.US

The United States economy grew at its fastest pace in over six years at the end of 2009, but a sluggish job market is still souring economists on the sustainability of the recovery.

Gross domestic product expanded at an annual rate of 5.7 percent in the fourth quarter, well above analysts’ expectations. It had grown at an annualized rate of 2.2 percent in the previous quarter. Analysts had forecast annualized growth of 4.8 percent in the quarter, and the better-than-expected result sent stocks higher when trading opened on Wall Street.
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The US president should not forget that the world will judge him on achievements US President Barack Obama must realise that his credibility, at home and abroad, is at risk because actions will always speak louder than words — no matter how good a speaker you are. In his first State of the Union address on Wednesday, Obama tried to shore up his declining popularity among the American people, and across the world, with an acknowledgement of past failures and fresh promises of change. His words sounded hollow, given his poor record so far, and he did not look powerful or even convincing behind the podium.
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The challenges awaiting Ben Bernanke once he’s approved, as expected, for a second term as Federal Reserve chairman will make the bumpy reappointment process seem like a walk on the beach.

It’s hard to overstate the difficulty of achieving just the right sense of balance and timing Bernanke will need as he begins his efforts to get the U.S. economy standing on its own two feet again.

Bernanke will need to start unwinding government programs that pumped trillions of dollars of liquidity into the economy in a mostly successful effort to open credit markets that shut down following the collapse of the U.S. housing market two years ago.
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U.S. Treasury Secretary Timothy Geithner warned a congressional committee Wednesday that the U.S. economic crisis is not over, and defended the bailout of insurance giant AIG, arguing that not doing anything would have amplified the scale of the financial crisis.

Testifying before the House Oversight Committee on the government’s rescue of AIG, Geithner described the decision by Treasury and the Federal Reserve to step in as “exceptionally difficult and enormously consequential.”
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