Fed Chief Bernanke Warns GOP: Stop Holding Debt Ceiling Hostage
Today, Federal Reserve chairman Ben Bernanke made another (probably futile) appeal to the Republican Party to stop holding the debt ceiling hostage.
“I fully understand the desire to use the debt limit deadline to force some necessary and difficult fiscal policy adjustments, but the debt limit is the wrong tool for that important job,” the Federal Reserve chairman said at the annual conference for the Committee for a Responsible Federal Budget in D.C. on Tuesday.
Republicans have recently tried to tie a debt ceiling increase to spending cuts, as well as completely unrelated proposals.
But if the debt ceiling is not raised, Bernanke said, the United States would be forced to stop payments on some of its existing obligations, possibly including Social Security and military pay.
The creditworthiness of the United States would be called into question and the financial markets could be severely disrupted, Bernanke said.“Failing to raise the debt ceiling in a timely way would be self-defeating if the objective is to chart a course toward a better fiscal situation for our nation,” he said.
But it wouldn’t be self-defeating if the intent is to deliberately crash the economy for political advantage. Is this what the GOP is doing? I’d hate to think so, but this question is becoming more and more relevant.
Frank says: