Bernanke Gives Few Specifics On How Fed Will Help Ailing Economy

VIDEO: David Muir on the possibility of the economy slowing again.
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Federal Reserve Chairman Ben Bernanke acknowledged the economic "elephant" in the room--that the U.S. economy has weakened far more than expected.

At a meeting of the Fed's top policymakers, Bernanke called the economic recovery "inherently uncertain."

Bernanke's affirmation of the economy's sluggish economic recovery comes after a week of troubling economic news.

Week of Troubling Economic News

VIDEO: David Muir on the possibility of the economy slowing again.
Is Slowing Economy Sign of Double Dip Recession?

Just 90 minutes before Bernanke spoke, the government released the latest Gross Domestic Product numbers for the second quarter showing that the country's economic output slowed sharply to a 1.6 percent pace. Earlier in the week, sales of existing homes hit a record low and unemployment continues to hover at 9.5 percent.

Bernanke said the economy "remains vulnerable to unexpected developments."

The thousands of people who lined up at dawn in Palm Beach County, Florida know plenty about unexpected developments. The slow recovery is something they feel every day. Coming by busloads, they venture to Palm Beach's convention center to get help modifying their mortgages in a desperate bid to hold onto their homes.

VIDEO: Recent anger at Democrats puts the Fed chairmans reconfirmation in jeopardy.
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Out west in San Fernando Valley, California, families are now getting turned away at food pantries, with supplies at near record lows.

Economists say that with economic growth at such a weak pace, the nation's unemployment rate could climb past 10 percent later this year or early next year.

Economic Recovery On Hold

All of this is further proof of an economic recovery on hold.

"At this juncture, the committee has not agreed on specific criteria for triggers for further action," Bernanke said.

While not offering specifics, Chairman Bernanke said that the Federal Reserve is standing ready to help, but what can it do?

VIDEO: Obama pleads for patience, conceding the economic recovery will take years.
Obama: Recovery 'Going to Take Some Time'

Jon Hilsenrath from the Wall Street Journal said that the Fed could lower interest rates even more. Already, they are at a historic low of zero to 0.25 percent.

What Should Obama Administration Do?

Martin Feldstein, chief economist advisor to President Ronald Reagan during the recession of the early 1980s, said that lowering interest rates back then worked. Since interest rates are already so low, he would advise the Obama administration to keep the nation's current tax cuts.

"Don't raise taxes at all, give it two years before you do that, it will halt spending even more," Feldstein said.

But would that be enough to create jobs?

VIDEO: Unemployment remains at 9.5 percent. What does it mean for the jobless?
Jobs Report Shows 131,000 Lost

Laura Tyson, chief economic advisor to President Bill Clinton in the 1990s, said that she would keep pushing for more spending by the White House on small business. The Obama administration has been pushing Congress to pass a bill to help small businesses.

"We know that small businesses are a major creator of jobs in the United States. We know that many small businesses are very credit constrained right now. They can't get money," Tyson said.

Bernanke continues to say that the country is not headed for a double-dip recession. He said that the recovery will pick up next year.

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