U.S. Federal Reserve Chairman Ben Bernanke says more government spending may be needed to combat economic weakness.

A fresh round of stimulus would be a good idea, he told the U.S. House of Representatives budget committee on Monday.

“Consideration of a fiscal package by the Congress at this juncture seems appropriate,” said Bernanke.

“We are in a very serious slowdown in the economy which has very serious consequences for the public,” he said.

“Whether it’s called a recession or not is of no consequence.”

In his speech before the committee, Bernanke suggested that Congress should design a stimulus package so that it would be “timely and well-targeted”.

He said it should limit the longer-term impact on the government’s budget deficit, which hit a record high in the last financial year.

Any government spending would need to kick in quickly to encourage people and businesses to boost spending and help the economy during the period in which economic activity would be otherwise weak, he said.

The Federal chief also said the package should include provisions that would aid the jammed credit markets, which has been a major factor in the economy’s slowdown.

“If the Congress proceeds with a fiscal package, it should consider including measures to help improve access to credit by consumers, home buyers, businesses and other borrowers,” he said.

“Such actions might be particularly effective at promoting economic growth and job creation,” he added.

IE