WASHINGTON — Europe has a debt crisis. America has a jobs crisis. Corporate profits could be in trouble. World financial markets are in turmoil. And no one seems prepared to ride to the rescue.
Federal Reserve Chairman Ben Bernanke bluntly warned Congress on Tuesday of what most of America has sensed for some time: The economic recovery, such as it is, "is close to faltering."
The central bank chief spoke on a day when the stock market spent most of the trading hours in bear market territory — down 20 percent from its most recent highs in April. A late-day rally helped the market finish higher.
Bernanke's exchange with lawmakers seemed to capture the growing belief that no one is prepared to help the global economy in any meaningful way anytime soon.
The Fed chief was asked about protests around Wall Street, which went on for an 18th day as demonstrators railed against corporate greed and expressed frustration over the economy.
Bernanke replied: "I think people are quite unhappy with the state of the economy and what's happening. They blame, with some justification, the problems in the financial sector for getting us into this mess. And they're dissatisfied with the policy response here in Washington. And at some level, I can't blame them."
Throughout the day, traders and U.S. policymakers kept one eye on Europe, where a debt crisis has dragged on more than a year. Investors worry that a messy default by Greece could hurt European banks and their American counterparts.
Even if a global recession can be avoided, the U.S. economy faces a bleak outlook. Some economists fear that Congress could worsen things by cutting taxes or raising taxes this year or next.
Andrew Tilton, an economist with Goldman Sachs, forecasts overall economic growth of just 1.7 percent this year, followed by a scant 0.5 percent annual rate in the first three months of next year. For all of 2012, he projects 1.4 percent growth. Normal growth is more like 3 percent.
Economists at Bank of America Merrill Lynch expect growth below 2 percent this year, next year and in 2013.
For most Americans, such weak expansion would feel like a recession. And it wouldn't reduce high unemployment. The nonpartisan Congressional Budget Office said last month that the unemployment rate will remain near 9 percent through the end of 2012.