by Calculated Risk on 10/04/2006 02:08:00 PM

From Reuters: Bernanke--housing slowdown to reduce GDP growth

Federal Reserve Chairman Ben Bernanke on Wednesday estimated that the decline in housing construction could reduce gross domestic product growth later this year by a percentage point.

"I think that I would estimate that slowing housing construction will probably take about a percentage point off of growth in the second half of this year and probably something going into next year as well," the Fed chairman told the Economics Club of Washington at a luncheon here.

At the same time, he said he was unsure how the dynamics of the housing market slowdown would play out, but noted other parts of the economy remain strong, including nonresidential construction.

The above comments were from the Q&A after Bernanke's speech today. Note that Bernanke believes the payroll tax is a general fund tax and that there is no annual surplus for Social Security:

Although demographic change will affect many aspects of the government’s budget, the most dramatic effects will be seen in the Social Security and Medicare programs, which provide income support and medical care for retirees and which have until now been funded largely on a pay-as-you-go basis.

Social Security ran a surplus of $177 Billion in fiscal 2006 alone. I've defended Bernanke before, however this comment is not only inaccurate, but irresponsible.