to assess. thus far in the recovery and to this day, there is little question that the economy has remained far from maximum employment, so measurement difficulties were not our focus. but as the attainment of our maximum employment goal draws nearer, it will be necessary for the fomc to form a more nuanced judgment about when the recovery of the labor market will be materially complete. as the fomc ’ s statement on longer - term goals and policy strategy emphasizes, these judgments are inherently uncertain and must be based on a wide range of indicators. 3 i will refer to the shortfall in employment relative to its mandate - consistent level as labor market slack, and there are a number of different indicators of this slack. probably the best single indicator is the unemployment rate. at 6. 7 percent, it is now slightly more than 1 percentage point above the 5. 2 to 5. 6 percent central tendency of the committee ’ s projections for the longer - run normal unemployment rate. this shortfall remains significant, and in our baseline outlook, it will take more than two years to close. 4 other data suggest that there may be more slack in labor markets than indicated by the unemployment rate. for example, the share of the workforce that is working part time but would prefer to work full time remains quite high by historical standards. similarly, while the share of workers in the labor force who are unemployed and have been looking for work for more than six months has fallen from its peak in 2010, it remains as high as any time prior to the great recession. 5 there is ongoing debate about why long - term unemployment remains these figures are based on the summary of economic projections ( sep ) submitted in conjunction with the march 2014 fomc meeting. the sep is an addendum to the fomc minutes and is available at board of governors of the federal reserve system ( 2014 ), “ minutes of the federal open market committee, march 18 – 19, 2014, ” press release, april 9. see the fomc ’ s statement on longer - run goals and monetary policy strategy ( pdf ), as amended effective january 28, 2014, which is available on the board ’ s website. see the sep in board of governors, “ minutes of the federal open market committee, march 18 – 19, 2014, ” in note 2. the share in cps employment of persons working part time for economic reasons rose from 3 percent prior to the recession to 6. 5 percent in november

ben s bernanke : achieving fiscal sustainability speech by mr ben s bernanke, chairman of the board of governors of the federal reserve system, at the national commission on fiscal responsibility and reform, washington dc, 27 april 2010. * * * i am pleased to be here today at the first meeting of the national commission on fiscal responsibility and reform. the president has assigned chairman bowles, chairman simpson, and their colleagues the very substantial task of charting a path to fiscal sustainability for the united states. the deliberations of this commission are especially timely because some of the fundamental sources of long - term fiscal imbalances are no longer distant forecasts, but instead are unfolding in the here and now. the task of developing and implementing sustainable fiscal policies is daunting, but meeting this challenge is absolutely essential. history makes clear that failure to achieve fiscal sustainability will, over time, sap the nation ’ s economic vitality, reduce our living standards, and greatly increase the risk of economic and financial instability. long - term fiscal challenges our nation ’ s fiscal position has deteriorated appreciably since the onset of the recession and the financial crisis. the exceptional increase in the deficit has in large part reflected the effects of the weak economy on tax revenues and spending, along with the costs of policy actions taken to ease the recession and steady financial markets. as the economy and financial markets continue to recover, and as the actions taken to provide economic stimulus and promote financial stability are phased out, the budget deficit should narrow over the next few years. however, even after economic and financial conditions have returned to normal, in the absence of further policy actions, the federal budget appears set to remain on an unsustainable path. a variety of projections that extrapolate current policies and make plausible assumptions about the future evolution of the economy show a structural budget gap that is both large relative to the size of the economy and increasing over time. moreover, as debt and deficits grow, so will the associated interest payments, an obligation that in turn further increases projected deficits. unfortunately, we cannot grow our way out of this problem. no credible forecast suggests that future rates of growth of the u. s. economy will be sufficient to close these deficits without significant changes to our fiscal policies. among the primary forces putting upward pressure on the deficit are rapidly rising healthcare costs and the aging of the u. s. population. federal spending for medicare and medicaid has increased substantially as a share of