US budget deficit threatens economy

Source: Press TV
http://www.presstv.ir/detail/159149.html


The US Federal Reserve has warned that the country's high budget deficit, unless lowered, will most likely further jeopardize the economy and the current unemployment crisis.

Speaking before the Senate Budget Committee, US Federal Reserve Chairman Ben Bernanke urged members to organize a credible program to lower the federal budget deficit.

Failing to do so would diminish investors' confidence, leading to further financial turmoil, he further explained.

The US Federal Reserve chairman also warned that the US government was on “an unsustainable fiscal path,” which could, in time, turn to financial disaster, AFP reported.

“The US economy will be moderately stronger this year than last, but it is likely to take up to five years for the jobs market to recover,” Bernanke went on to say.

Recent statistics showed that 103,000 new jobs were created in December.

During his first testimony to the new Congress, the chairman stated that an increase in evidence of a “self-sustaining recovery in consumer and business spending may be taking hold.”

The US Bureau of Labor's new statistics indicate that the unemployment rate has dropped from 9.8 percent to 9.4 percent, but analysts have observed that these numbers could be affected by the fact that some unemployed people have stopped looking for jobs and are, therefore, no longer being on the unemployed list.