Updated from 11:07 a.m. ESTFederal Reserve Chairman Ben Bernanke supported the case for both easy monetary policy and fiscal stimulus in his comments on Capitol Hill Thursday morning. After outlining the string of events that led the Fed to forecast a weak growth environment for the U.S. economy in 2008 and perhaps into 2009, Bernanke, in a question-and-answer session after his speech, said a stimulus package "would be significant, not just window dressing." As he did in
Congress is debating possible stimulus solutions, including tax rebates or the extension of the tax cuts President Bush put into place in 2001. Bernanke emphasized however, that the best and most useful stimulus would be one that addresses the immediate needs of the economy within the next two to three months. Bernanke's testimony suggests "the inertia in Washington is dissipating in the shadow of a decelerating economy," writes Joe Brusuelas, chief economist at IDEAglobal.