Bernanke Pushes Economic Stimulus Plan
ALEX COHEN, host:
From the studios of NPR West, this is DAY TO DAY. I'm Alex Cohen. In a few minutes, we'll hear from my colleague, Alex Chadwick. He is in Nevada right now. That's where Republicans and Democrats will caucus on Saturday. We'll hear why Nevada matters in the race for the White House.
But first, we go to Capitol Hill and one of the biggest issues for voters in this year's election, the economy. Today that topic was front and center before the House Budget Committee.
Mr. BEN BERNANKE (Federal Reserve Chairman): On the whole, despite improvements in some areas, the financial situation remains fragile and many funding markets remain impaired. Adverse economic or financial news thus has the potential to increase financial strains and to lead to further constraints on the supply of credit to households and businesses.
COHEN: That's Federal Reserve Chairman Ben Bernanke on the Hill today delivering his assessment of the U.S. economy. His view, as expected, was bleak; so are the numbers that came out earlier this morning. Housing starts last year were down nearly 25 percent from 2006. That's the second biggest annual decline on record. Bernanke told the House Committee he would back an economic stimulus package to bolster the weak economy and avert a possible recession.
Mr. BERNANKE: A number of analysts have raised the possibility that fiscal policy actions might usefully complement monetary policy in supporting economic growth over the next year or so. I agree that fiscal action could be helpful in principle, as fiscal and monetary stimulus together may provide broader support for the economy than monetary policy actions alone. But the design and implementation of the fiscal program are critically important. A fiscal initiative at this juncture could prove quite counterproductive, if for example it provided economic stimulus at the wrong time or compromised fiscal discipline in the longer term.
COHEN: Bernanke said he wouldn't endorse a plan. Later in the program, we'll talk about the possible options with Nancy Marshall-Genzer of the business show MARKETPLACE.