Even as President Barack Obama prepared a budged focused on ending the recession, there are deep concerns that the recession may not end soon. But the nation's top policymaker says growth could return next year if the financial system is put in order. Federal Reserve Chairman Ben Bernanke told a Congressional hearing that despite the fact the economy is undergoing a severe contraction the recession could end in 2009, paving the way for a year of recovery in 2010. This all depends on whether government efforts succeed in stabilizing the financial markets.
However, Bernanke warned the Senate Banking Committee that if we don't stabilize the financial system, we're going to founder for some time. Economists agree that any economic recovery next year could be weak probably with continued high unemployment. The economy faces major risks from a deepening global recession and a reinforcing cycle of economic weakness and financial frailty.
An analysis of the Fed chairman's comments indicates there is no guarantee that extraordinary federal efforts to stabilize the financial system would be enough to fix things. That may indicate that any financial support requested of Congress should be approved in the interest of bringing stability to financial institutions.