Bernanke Offers Support for Stimulus Package
By EDMUND L. ANDREWS
Published: October 20, 2008
WASHINGTON — The chairman of the Federal Reserve, Ben S. Bernanke, said on Monday he supported a second round of additional spending measures to help stimulate economy.
“With the economy likely to be weak for several quarters, and with some risk of a protracted slowdown, consideration of a fiscal package by Congress at this juncture seems appropriate,” Mr. Bernanke told the House Budget Committee.
The Fed chairman said the economic outlook was still so uncertain that the optimal size, composition and timing for any new stimulus plan were unclear.
But the Fed chairman said Congress should try to develop a plan that would have its maximum impact when the economy is most likely to be at its weakest. Many if not most private forecasters contend that the economy has already entered a recession, which would seem to argue for measures that would bolster overall spending as soon as possible.
“If Congress proceeds with a fiscal package, it should consider including measures to help improve access to credit by consumers, homebuyers, businesses and other borrowers,” Mr. Bernanke said. “Such actions might be particularly effective at promoting economic growth and job creation.”
It was unclear what kind of measures the Fed chairman had in mind.
Democratic leaders have called for a $300 billion package of spending measures that would include a big increase in spending on infrastructure projects; an additional extension of unemployment benefits; and increases in spending for food stamps, home heating subsidies and state Medicaid programs.
In his comments, Mr. Bernanke again warned, as he did last week in a speech in New York, that a recovery would take time.
“Even before the recent intensification of the financial crisis, economic activity had shown considerable signs of weakness,” he told lawmakers. Private-sector employers shed 168,000 jobs in September and a total of 900,000 jobs since January. Real consumer spending, adjusted for inflation, declined during the summer and appears to have declined yet again in September.
“The pace of economic activity is likely to be below that of its longer-run potential for several quarters.”
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This is a Bernanke package, not the democrat one. While the democrat package is mentioned, this is Bernanke with another proposal.
a bailout is a bailout is a bailout.
Agreed. I just wonder how much they want/can pilfer before going out.
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