Washington, April 28: US Federal Reserve Chairman Ben Bernanke has admitted that the country’s massive unemployment and debt remain as two major stumbling blocks for a true economic recovery.
“Long-term unemployment in the current economy is the worst, really the worst it’s been in the post-war period,” Bernanke said at a press briefing following a Fed policy meeting on Wednesday.
Bernanke acknowledged that the pace of improvement in the ailing US labor market remained “quite slow” and that about 45 percent of those without jobs have been unemployed for six months or longer.
“We know the consequences of that can be very distressing, because people who are out of work for a long time, their skills tend to atrophy,” the US Federal Reserve chairman noted.
“We are digging ourselves out of a very, very deep hole. We are still something like seven million-plus jobs below where we were before the crisis,” Bernanke added.
The US Fed chief went on to say that the country’s high debt levels are “the most important long-term economic problem facing the US.”
He made the remarks as US Treasury Secretary Timothy Geithner has forecast that the US will hit its debt limit ceiling of $14.3 trillion on May 16, which means that the government will no longer be able to legally borrow money for its federal spending.
On April 21, US President Barack Obama echoed similar concerns, saying his country faces “unsustainable” financial situation as the national debt and budget deficit continue to weigh so heavily on the American psyche.
The US budget shortage has also hit a record $1.65 trillion this year –10.9 percent of GDP — according to figures in Obama’s 2012 budget.
US Standard & Poor’s rating agency said last week that the agency’s attitude toward America’s overall economic condition has changed from “stable” to “negative,” mainly due to US lawmakers’ inability to reach a consensus over the ongoing budget crisis.
On April 13, Obama rolled out a wide-ranging deficit reduction plan aimed at slashing the country’s budget shortfall by $4 trillion within 12 years, and ever since has been struggling to convince Americans that his plan can solve their financial woes.
——–Agencies