Federal Reserve Chairman Ben Bernanke told lawmakers a recovery minus housing growth is hurting the American economy.
While testifying in front of a congressional committee, Bernanke acknowledged today's slow recovery is significantly different from the pro-growth period that followed the early 1980s recession.
Bernanke told lawmakers there are key differences in the two recovery periods — one of them being the absence of a housing recovery after the post-2009 recessionary period. Comparatively, other post-recession cycles — including the 1980s upswing — were accompanied by improvements in housing activity.
The Fed Chair said health care costs remain a giant "elephant in the room," with health care spending close to representing 9% to 10% of gross domestic product.
Bernanke told house members cutting federal discretionary spending to zero is not enough in itself to resolve the nation's deficit crisis.
He encouraged lawmakers to focus on quality of spending to ensure cuts are aligned with the nation's economic growth goals.