The Federal Reserve chairman, in testimony before the Joint Economic Committee of Congress on Wednesday, suggested that ending the nation’s long-term unemployment crisis would be a more effective way of shrinking government deficits and debt than the austerity cocktail funneled down our throats by Congress and the White House in recent years.
“The loss of output and earnings associated with high unemployment … reduces government revenues and increases spending on income-support programs, thereby leading to larger budget deficits and higher levels of public debt than would otherwise occur,” Bernanke said.
Instead of doing anything about unemployment, which hovers at 7.5 percent four years after the end of the Great Recession, Congress and the White House have spent the past two years finding diabolically creative new ways to slash government spending. That has worsened the unemployment crisis, making Bernanke’s job harder.
Chosen excerpts by Job Market Monitor
via Bernanke Tells Congress Fighting Unemployment Is A Better Cure For Government Debt Than Austerity.
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