Bernanke To Congress: Don’t Cut Government Spending Too Quickly

In a major speech in Minneapolis today, Fed Chairman Ben Bernanke warned Congress that cutting too much government spending too quickly would imperil the economic recovery. “While prompt and decisive action to put the federal government’s finances on a sustainable trajectory is urgently needed, fiscal policymakers should not, as a consequence, disregard the fragility of the economic recovery,” Bernanke said. “In the absence of adequate demand from the private sector, a substantial fiscal consolidation in the shorter term could add to the headwinds facing economic growth and hiring,” he added.