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Fed Chairman And Congressional Budget Office Confirm Spending Cuts Will Harm Economy

Federal Reserve Chairman Ben Bernanke at a press conference today reiterated his view that short-term spending cuts will harm the economic recovery and lead to job losses. “I don’t think that sharp, immediate cuts in the deficit would create more jobs,” he said. “I think in the short run, you know, the fiscal tightening is at best neutral and probably somewhat negative for job creation.” This hews closely to an analysis released today by the Congressional Budget Office, which found that implementing cuts “while economic activity and employment remain well below their potential levels would probably slow the economic recovery.” Still, Congressional Republicans keep pushing the lie that spending cuts will spur job creation, and seem to be winning over the public, as a majority of Americans (including 40 percent of Democrats) believe that spending cuts will increase job growth.

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