Bernanke Ready to Spend More to Prop Up Economy

(Newser) – Federal Reserve Chairman Ben Bernanke is such a fan of the decision to buy $600 billion in Treasury securities to prop up the economy that the Fed is prepared to spend even more. Added economic stimulus might still be needed because the current recovery is weak, Bernanke warned in an interview on CBS' 60 Minutes. The economy is only "close to the border" of a "self-sustaining" recovery, which requires a growth rate of some of 2.5%, he added. Continued unemployment remains the "the primary source of risk that we might have another slowdown," Bernanke warned.

He insisted the government spending won't trigger runaway inflation, as Republicans argue, and that such concerns are "way overstated." What "we’re trying to do is achieve a balance," he said. "We’ve been very, very clear that we will not allow inflation to rise above 2%. We could raise interest rates in 15 minutes if we have to. There really is no problem with raising rates, tightening monetary policy, slowing the economy, reducing inflation, at the appropriate time. That time is not now."