The Deficit Warnings Keep Coming
In a speech on global imbalances, Fed Chairman Bernanke again warned about the need to put the U.S. on a sustainable fiscal path, saying:
"The United States must increase its national saving rate. Although we should deploy, as best we can, tools to increase private saving, the most effective way to accomplish this goal is by establishing a sustainable fiscal trajectory, anchored by a clear commitment to substantially reduce federal deficits over time."
This is very similar to the advice CRFB has been recommending. The U.S. needs to adopt a credible budget plan now, to be phased in gradually. In our report, Deficit Reduction: Lessons from Around the World, we recommend six lessons for creating a consolidation plan: