June 3 (Bloomberg) -- Federal Reserve Chairman Ben S. Bernanke said large U.S. budget deficits threaten financial stability and the government can’t continue indefinitely to borrow at the current rate to finance the shortfall.
“Unless we demonstrate a strong commitment to fiscal sustainability in the longer term, we will have neither financial stability nor healthy economic growth,” Bernanke said in testimony to lawmakers today. “Maintaining the confidence of the financial markets requires that we, as a nation, begin planning now for the restoration of fiscal balance.”
Bernanke’s comments signal that the central bank sees risks of a relapse into financial turmoil even as credit markets show signs of stability. He said the Fed won’t finance government spending over the long term, while warning that the financial industry remains under stress and the credit crunch continues to limit spending.
What a load of crap...the Federal Reserve is printing money and buying debt so fast that I'm sure the paper and ink factories are working overtime. Oops, I am sorry they are "quantitative easing". I'm sure the White House would say this is part of the overall plan to create more jobs!
Bernanke warns against deficit spending
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Posted - 06/03/2009 : 21:07:52
