what happens, german bernanke, if the unemployment rate does not decline as the economy improves? >> that is the possible risk. we anticipate the unemployment rate is likely to decline relatively slowly. there are a couple of factors. one is the pace of overall growth. if growth is moderate, that will not quickly lower the unemployment rate. that is the first observation. the second has to do with the rate of productivity. following the 2001 recession, productivity gains were significant, which is generally a good thing. and then that firms were relatively slow at bringing workers back. -- it meant that firms were relatively slow at bringing workers back. we do not anticipate productivity growth will continue at that rate going forward. it does, that will reduce the number of workers at firms need to bring back to meet demand. there is a possibility -- i would not consider deleting the possibility. there's a possibility that unemployment will stay around 10%. if that were to happen, it is one of the risks we were just discussing, because that would produce -- reduce consumer confi

that i co-chair but it does seem to me that a basic point screens out of the analysis and by german bernanke regardless of how big you want the government to be for the enormous advantages could be derived from our income tax system. we could increase fairness however perceived you could increase economic efficiency by lowering marginal rates and thereby create an environment conducive to economic growth. moreover you can design a structure that produces the rapidly growing stream of revenue without imposing an ordnance pain. as for the proper size of the government, we all have our own view and i would like to think of myself as a fiscal conservative but i find it hard to imagine a vote that does everything on the spending side. on the other and even our second smallest government does involve substantial tax increases. in fact it would imply an overall tax burden somewhat less than 24 cents higher than what we've been used in the past. thank you very much. [applause] >> members of the commission, i appreciate the opportunity to discuss with you the challenges you face as you craft a packag

we thank you for your testimony today, german bernanke, and look forward to working with you -- chairman bernanke, as the committee continues to focus on helping our economy recover and expand. >> i am pleased to join in welcoming chairman bernanke before the committee. the injection of $1.3 billion of liquidity quelled the panic in financial markets. although i disagree with the fed's participation of the bailout of aig and bear stearns, the fed's timely action as lender of last resort in markets prevented the financial panic from becoming a depression. during the spring of 2009, the stress tests and subsequent capital increases by large banks restored confidence in financial institutions and markets. largely because of these decisive actions, the u.s. economy is now beginning to recover. however, the recovery will continue to be sub-par as businesses to lay critical hiring and investment decisions due to the uncertainty generated by president obama and congressional democrats to increase taxes, raise their prices, an act of killing regulations, and generate a dangerous level of federal

even though i supported german bernanke for his reappointment -- supported ben bernanke for his reappointment i think he was slow in coming to the table. we have clearly not done enough. we were willing to take care of wall street and have done little for homeowners. a lot of people gained the system. some were speculators. summer packaging and repackaging securities. on wall street, cowboys made a lot of money. host: is there more action ahead? guest: president barack obama has been pretty good on this and is getting increasingly better in terms of providing states leeway. sometimes a person can stay in their home by talking to the local lender as long as they can find out where the mortgage is held. it there is a foreclosure, it does not do damage to that family. it is the next-door neighbor whose house declines in value the other foreclosure three doors down causes the value of the whole neighborhood to decline. the community declines. police and fire protection is cut back because they have fewer homeowners. all of that happens when there is a high foreclosure rate. it is not just an indi