Federal Reserve Chairman Ben Bernanke was testifying in front of the House Budget Committee this morning and he made some interesting comments about our ongoing deficits and debt levels wrecking the future. The FOMC has long maintained that the deficits cannot continue at the same rate as the past. Now with more than $1 trillion projected this year and with debt reaching over 100% of GDP, it is a part of Ben Bernanke’s speech this morning. He noted the risks of serious economic consequences down the road and said that U.S. fiscal policy must be placed on a sustainable path. He even noted that the current debt trajectory acts as a threat of crowding out private capital and reducing productivity. It also reduces our ability to respond to economic shocks.
JON C. OGG
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