Ben Bernanke on Sunday pressed for infrastructure spending and tax reform, saying they would benefit the economy more than tax cuts.
“I think that it is important, as I mentioned, even though the recovery is proceeding, the underlying growth path is not very strong. Productivity gains have not been very strong,” Bernanke said on CNN’s “Fareed Zakaria GPS,” referring to President Trump’s proposed tax cuts.
The former U.S. Federal Reserve Chairman said the Trump administration's plans to cut personal tax rates appear ill-timed and may do little to spur a higher rate of economic growth.
https://www.bloomberg.com/api/embed/iframe
“It would have made more sense to have more tax cuts and more spending in 2013 or 2012,” Bernanke said in an interview on Bloomberg Television. “From that perspective with unemployment at 4.5 percent, the case today is a little weaker.”
“What we want to do is try to improve the supply side of the economy, make it grow faster, have greater potential,” he said.
“And I think that probably that to do that, I would think that on the fiscal side, that infrastructure spending that improves our roads, our bridges, our schools, and tax reform, not necessarily tax cuts, but reform that makes the system simpler, more efficient, those would probably be the highest-return fiscal actions in terms of getting higher growth,” he continued.
“If I have to increase the deficit, I think I'd rather do it on infrastructure and maybe tax reform,” he added.
Bernanke also said partisan politics makes lawmakers dig in their heels rather than working together to help improve the economy.
Additionally, Bernanke commented, on CNN's "Fareed Zakaria GPS" that "we don't have to balance the budget every year, by any means. But we do have to worry about fiscal stability over the longer term," adding that "rising income inequality, lack of social mobility help explain why Donald Trump was elected"...
"There's a lot of people who are left out of the recovery"
Yes, Mr. Bernanke... just a few Americans 'missed out'...
Oh and if there was ever a nail in the coffin for the US economy, Bernanke explained..."things look pretty good, generally speaking... Q1 was an aberration"
That went well last time "we see no recession, the US economy will show resilience"