Bernanke Sends Warning about Debt Limit Time Bomb
Submitted by Aaron Huber on February 10, 2011
Bernanke coupled his warning with a call for the Obama administration and Congress to put in place a credible plan to curb future budget deficits. He also offered a moderately more optimistic assessment of the economy's prospects than in other recent remarks, although he made clear the recovery still needs support from the Fed.
Federal Reserve Chairman Ben Bernanke on Thursday issued a stern warning to Republican lawmakers that delays in raising the United States' $14.3 trillion debt limit could have "catastrophic" consequences.
"Beyond a certain point ... the United States would be forced into a position of defaulting on its debt. And the implications of that on our financial system, our fiscal policy and our economy would be catastrophic," he told the National Press Club.
Bernanke coupled his warning with a call for the Obama administration and Congress to put in place a credible plan to curb future budget deficits. He also offered a moderately more optimistic assessment of the economy's prospects than in other recent remarks, although he made clear the recovery still needs support from the Fed.
