Bernanke says U.S. must start to rein in deficit

Sewell Chan
The New York Times

WASHINGTON — The Federal Reserve chairman said Wednesday that the government had to make “difficult choices” to address its gaping deficits and warned that “postponing them will only make them more difficult.”

The chairman, Ben S. Bernanke, said that a “credible plan” for reining in federal deficits could help lower long-term interest rates. “Although sizable deficits are unavoidable in the near term, maintaining the confidence of the public and financial markets requires that policy makers move decisively to set the federal budget on a trajectory toward sustainable fiscal balance,” he said.

In testimony to the Joint Economic Committee of Congress, Mr. Bernanke said that a moderate recovery had begun, but that it would take “a significant amount of time” to restore the 8.5 million jobs lost in the last two years. Of particular concern, he said, was that 44 percent of the unemployed in March had been jobless for at least six months.

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