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Bernanke Sees 200,000 Hit To Jobs From Budget Cuts

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http://uk.reuters.com/article/2011/03/02/uk-usa-fed-bernanke-idUKTRE72164G20110302

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 over two years.

That estimate is at odds with losses of as much as 700,000 cited by Democrats but also clashes with forecasts of job gains Republicans have pointed to.

Bernanke said that a $60 billion cut along the lines being pursued by Republicans 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.

Pressed on how such job losses would affect the recovery, Bernanke said that in spite of concerns about the longer-term budget deficit, the Fed's focus is on reducing unemployment.

"I would like to see job creation," he said. "What I have been trying to focus on is, we have got to keep our eye on deficit reduction, but we need to think about it in a long-term framework."

The Republican-run House has passed a budget bill for the current fiscal year that includes $61 billion in spending cuts, but majority Democrats in the Senate say the reductions would endanger the economic recovery.

So $60bn less govt spending will cut growth by 0.2% in the first year and 0.1% in the second.

Luckily Bernankes printing press is helping to create millions of jobs in the US.

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  • 312 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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