Posted by JM Ashby
Although Bernanke's warnings are more subdued than that of his public counterparts, he is still flat-out saying that jobs, a lot of jobs, are going to be lost if Republicans are allowed to cut as deeply as they wish to.
Keep in mind that the cuts which Republicans are proposing right now only account for a roughly half of a fiscal year. They will push for much deeper cuts in the next full-fiscal year budget.
(Reuters) - Federal Reserve Chairman Ben Bernanke said on Wednesday a Republican spending cut plan would not cause a big dent to U.S. economic growth, but could cost around 200,000 jobs.
Bernanke said that a $60 billion cut along the lines being pursued by Republican in the House of Representatives would likely trim growth by around two-tenths of a percentage point in the first year and one-tenth in the next year.
"That would translate into a couple of hundred thousand jobs. So it's not trivial," he said in response to questions from members of the House Financial Services Committee.
"So be it."