A promise was once made by the Chairman of the Federal Reserve, Ben Bernanke, a specialist on The Great Depression that the mistake of tightening the monetary policy very soon and delaying an economic slump which it committed in the year 1937, would never be repeated by it.

As the interest rates have remained close to zero since the latter part of 2008 and the size of the balance sheet of the Fed has tripled to $2.85 trillion, it shows that he has kept his word. However to counter a similar chilling effect on the economy brought about by slashing government spending, there is not much Bernanke can do.

If we look back at the year 1937, it witnessed rapid growth for 3 consistent years in the US economy, reason being the government programs targeting the end of Great Depression of 1929. At that time there was a fall in federal government spending by nearly 10 % alongside the central bank clamping down hard on lending.

The year 1938 saw the economy contracting again, with the rate of joblessness also increasing.

When legendary economist Milton Freidman was being honored on his 90^th birthday in a conference held in the year 2002, Bernanke had said apologizing that though it was done with regard to the Great Depression; however it would not be done again.

Tuesday would see Bernanke convening the next policy setting meeting of the Fed as the US faces increasing concern of sliding into another recession with Europe staggering toward a deeper debt crisis. Nevertheless another uncertainty building aspect was added by S&P as it decided on Friday to relegate the US credit rating.

Bernanke has limited options.