Bernanke Backs Stimulus Package

Posted October 20, 2008 at 10:29am

Federal Reserve Chairman Ben Bernanke advocated another economic stimulus package in prepared testimony Monday, lending support to Democratic leaders who have pushed for a round of emergency spending for months.

“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 remarks prepared for his appearance before the House Budget Committee.

Bernanke suggested such a package should be designed so that it peaks during the time when the economy is expected to be weak, and should limit long-term impacts on the federal budget deficit. He did not offer details on the size of a stimulus.

“In the ideal case, a fiscal package would not only boost overall spending and economic activity but would also be aimed at redressing specific factors that have the potential to extend or deepen the economic slowdown,” Bernanke said.

In particular, he said Congress “should consider including measures to help improve access to credit by consumers, homebuyers, businesses and other borrowers.”