Paulson, Bernanke gloomier on economy

Published: October 16, 2007, 1:01 pm

Treasury Secretary Henry Paulson, left, and Federal Reserve Board Chairman Ben Bernanke on Capitol Hill, September 20, 2007. (AP Photo/Lauren Victoria Burke) by William Neikirk Earlier this year, the U.S. Treasury and the Federal Reserve downplayed the risk of the housing correction to the U.S. economy. But this is no longer true. Economic decline, a credit crunch, home foreclosures, financial market turmoil and fear among investors are enough to tease out true candor. Both Treasury Secretary Henry Paulson and Fed chairman Ben Bernanke have joined the chorus of Americans who view the housing correction's dangerous financial tentacles as a real and present economic danger. Paulson, forsaking his cheerleading economic role, said in a speech today that "despite strong economic fundamentals, the housing decline is still unfolding and I view it as the most significant risk to our economy. The longer housing prices remain stagnant or fall, the greater the penalty to our future economic

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