Bernanke says extending tax cuts could be stimulative
Three Senate Democrats have said it. As have a couple House Democrats. And yesterday, Federal Reserve chief Ben Bernanke joined them.
The topic? Whether to raise taxes on income, capital gains, estates, and dividends by allowing the 2001 and 2003 tax laws to expire.
According to The Hill, Federal Reserve Chairman Ben Bernanke said extending the tax cuts enacted during President George W. Bush’s administration could provide a boost to the economy.
Bernanke said, “In the short-term, I would believe that we ought to maintain a reasonable degree of fiscal support, stimulus for the economy.” (Note: at a Christian Science Monitor breakfast Treasury Secretary Timothy Geithner said it’s likely the Administration will let at least some of the tax cuts expire.)
Bernanke was also asked if spending cuts would help restore confidence in the economy and get it going again.
“We need to look at all the programs for their merits, both in terms of their short-term stimulative effects and also in terms of how well they would support growth in the long term.”