Ben Bernanke supported the Obama administration’s economic policy before Congress today, the Wall Street Journal reports. The $787 billion stimulus bill should boost “demand and production” and soften job losses over the next 2 years, the Federal Reserve chief told the Senate Budget Committee. The expansion of government debt required by the stimulus is “unavoidable” Bernanke said, given the consequences of inaction.
While the stimulus plan is a positive step, Bernanke reiterated that more action was needed to tackle the problems in financial markets. “Historical experience strongly suggests that, without a reasonable degree of financial stability, a sustainable recovery will not occur,” Bernanke said.