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With the pressure building from the growing emotional response to the economic slowdown in the US, Ben Bernanke is backing a stimulus package  in hopes of getting the economy growing faster.

I'm personally uncomfortable with the idea of making these decisions based on the fears and resultant pressures from investors, rather than wait for the numbers to come out and tell us if things are really as bad as the fears of these people.

Some critics are even saying it's too late for this to happen, creating even more fear. In a climate of fear, a lot of stupid things can be done, and hopefully that won't be the result of any action taken.

"I think that the markets are in panic mode, and there is the risk that sentiment becomes so bad that we effectively talk ourselves into recession," says Joseph LaVorgna, the chief U.S. economist for Global Markets Research.

LaVorgna is right, and his comments need to be taken into consideration, although the growing panic will probably prompt some type of action to be taken by Congress.

Some of the ideas being thrown around are tax credits, accelerated depreciation, extended unemployement benefits, temporary business expensing and rebates.

Bernanke did say if this is going to be done, it'll have to be done quickly.

"Stimulus that comes too late will not help support economic activity in the near term, and it could be economically destabilizing if it comes at a time when growth is already improving," he testified.

Interestingly, in Bernanke's view, he still believes there isn't going to be a recession. The problem is he doesn't have the status of his Fed predecessor Alan Greenspan yet, and for the most part doesn't have the full confidence of the business and financial community yet. One of the reasons for the irrational fears looming behind all of this.

So we have the problem of fear driving all of this, with no proof there is going to be a recession. There are potential negative consequences if a stimulus package is put through, and also if there are further cuts in the interest rates.

The point Bernanke is saying isn't that he believes there's going to be a recession, but if others believe it and want to act on it, the time to do it is now.

With the underlying fundamentals of the economy still strong, it's a little puzzling as to why there's such a sense of panic in the market. During Greenspan's rein at the fed, there were recessions and slowdowns that came and went, and I don't remember it being this feared. 

So should Ben Bernanke and Congress take steps to stimulate the economy? On Bernanke's part, his power is in the setting of interest rates. The major downside there is the potential weakening of the dollar and increasing inflation.

On the part of Congress, they could be offering a package that is based on nothing but a guess, and there's no proof a recession is here, just the fear there is. They are in the position of having to guess which way they should go. They could actually do harm if they pass it, and of course suffer political consequences if they don't, and things end up being worse than expected.

Of course all of this is part of the problem of endlessly creating money and putting it into the market. It's one of the factors beind the ongoing booms and busts we experience in the economy.

Cutting interest rates on Bernanke's part shouldn't hurt too much, while a stimulation package could go either way. As in many cases with the government, it's usually best to let things go and let the market sort it out. So while I don't think they should interfere, I doubt that they can resist the temptation to look like heroes.

More than likely we'll see action taken, which if it produces negative effects, they hope will be forgotten until the next time it comes around. That doesn't mean they should though.