Fed Boss: Threat From Deficits 'Real And Growing'

[The Northerner]

The economy could be hurt if Congress and the White House fail to come up with a plan to curb the nation's huge budget deficits in the coming years, Federal Reserve Chairman Ben Bernanke warned on Monday.

Bernanke, in a speech prepared for delivery, reiterated his belief that the government shouldn't raise taxes or slash spending now because the economic recovery is still too fragile.

But failing to bring the deficits under control could endanger the economy later on, he said. Exploding budget deficits can lead to higher interest rates for people buying homes and cars, and for businesses buying equipment or expanding operations. That could crimp Americans' spending and slow economic growth.

"The threat to our economy is real and growing," Bernanke said. "The sooner a plan is established, the longer affected individuals will have to prepare for the necessary changes."

The federal government is on track to produce its second-highest deficit ever — $1.3 trillion — for the budget year that ended Sept. 30. That would be slightly below last year's record $1.4 trillion in red ink.

Read more: http://www.npr.org/templates/story/story.php?storyId=130335128

[bullwinkle428]

1. Did Bernanke sound any kind of warnings when Bush was

cranking up the deficit to record levels?

[Octafish]

2. We could cut the Pentagon budget in half for a big savings.

That is, if We the People really ran things.

[independent_voter]

6. the pentagon undermines our security

by requiring us to borrow from china for it's overspending

[gratuitous]

3. We shouldn't raise taxes or slash spending

So what does Bernanke propose? Because as far as budgetary matters go, there's only taxes and spending that can have an effect on the bottom line. As for interest rates, they're at historic lows right now. Why aren't the banks lending? Why aren't we borrowing that cheap money to spend on needed projects, like infrastructure improvement and maintenance? Projects that hire workers, who in turn spend their salaries in their communities? Instead, we're blowing hundreds of billions of dollars a year on wars that don't result in any kind of community multiplier.

[PoliticAverse]

4. "the longer affected individuals will have to prepare"

"The sooner a plan is established, the longer affected individuals will have to prepare for the necessary changes."

Translation - don't expect to get the social security you think you will.

[independent_voter]

5. they were bad then, but they're tripple now nt

[MadHound]

7. One of the reasons we should let all the Bush tax cuts expire

Not to mention that we could put some of those trillions towards a WPA style job creation program, and use the majority of that money to pay down our debt.

A huge national debt is like sailing our economy into a headwind, it slows everything down tremendously.