Bernanke Sees Another Stimulus Package as Good Idea
On Monday Federal Reserve Chairman Ben Bernanke told Congress that a fresh round of government stimulus is a good idea because there's a risk the country's economic weakness could last for some time. This is the first time Bernanke has supported such extra spending - something that President George W. Bush has not been keen on.
"With the economy likely to be weak for several quarters, and with some risk of a protracted slowdown, consideration of a fiscal package by the Congress at this juncture seems appropriate," Bernanke said in prepared testimony to the panel.
A trio of hard blows from the housing, credit and financial crises has badly pounded the economy.
Many analysts predict the economy will shrink later this year and early next year, meeting the classic definition of a recession.
Bernanke suggested that Congress design the stimulus package so that it will be timely, well targeted and would limit the longer-term affects on the government's budget deficit, which hit a record high in the recently ended budget year.
Any stimulus package would need to kick in quickly to entice people and businesses to boost spending and buck up the economy during the period in which economic activity would be otherwise weak, Bernanke said.
Published on October 20, 2008
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