Reducing the debt-to-GDP ratio is the most important long-term fiscal policy for the US, said Fed Chairman Ben Bernanke during his semiannual report to Congress.
Ben Bernanke sat down in front of a microphone Tuesday and offered some blunt advice to the elected officials who have been failing to agree on a deficit-reduction plan.
Bring the federal deficit down, the Federal Reserve chairman said, enough that the national debt actually falls back to precrisis levels.
Chairman Bernanke's semiannual report to the Senate Banking Committee comes as Democratic and Republican lawmakers are locked in contentious debate over fiscal policy – a debate that could result in big cuts to federal spending in a “sequester” at the end of this week.
His advice also implicitly challenged President Obama’s stated goal as not sufficiently ambitious. Mr. Obama has said he’s “fighting” for a plan to “stabilize our debt and our deficit in a sustainable way for the next decade.”
Bernanke used some similar language, but suggested a much more challenging target.
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