Bernanke on Our Fiscal Woes
Speaking in Dallas yesterday, Federal Reserve Chairman Ben Bernanke reiterated the choices we will have to face to regain fiscal sustainability. He lays out options our plainly and clearly:
"To avoid large and unsustainable budget deficits, the nation will ultimately have to choose among higher taxes, modifications to entitlement programs such as Social Security and Medicare, less spending on everything else from education to defense, or some combination of the above. These choices are difficult, and it always seems easier to put them off--until the day they cannot be put off any more. But unless we as a nation demonstrate a strong commitment to fiscal responsibility, in the longer run we will have neither financial stability nor healthy economic growth."
CRFB has argued that serious deficit reduction shouldn't begin until after the economy is on a clear and strong recvoery path, and Bernanke is in complete agreement. But we, and he, have shown that adopting a long-term fiscal sustainability plan now has nothing but rewards. Here's what Bernanke said yesterday:
"...nothing prevents us from beginning now to develop a credible plan for meeting our long-run fiscal challenges. Indeed, a credible plan that demonstrated a commitment to achieving long-run fiscal sustainability could lead to lower interest rates and more rapid growth in the near term."
Thanks for renewing your membership in the Announcement Effect Club, Ben.