Bernanke: You Dems Are Turning America Into Greece

OK, he didn’t specifically say that, but, for all intentions, that is what he meant

With uncharacteristic bluntness, Federal Reserve Chairman Ben S. Bernanke warned Congress on Wednesday that the United States could soon face a debt crisis like the one in Greece, and declared that the central bank will not help legislators by printing money to pay for the ballooning federal debt.

Recent events in Europe, where Greece and other nations with large, unsustainable deficits like the United States are having increasing trouble selling their debt to investors, show that the U.S. is vulnerable to a sudden reversal of fortunes that would force taxpayers to pay higher interest rates on the debt, Mr. Bernanke said.

“It’s not something that is 10 years away. It affects the markets currently,” he told the House Financial Services Committee. “It is possible that bond markets will become worried about the sustainability [of yearly deficits over $1 trillion], and we may find ourselves facing higher interest rates even today.”

This is exactly what happens when a government spends recklessly and at record levels. The GOP Congress during this decade was bad, and when the Democrats took over both sections of Congress in 2007 they said “let us show you wankers how it is really done.” Unsustainable spending at unbelievable record levels causing record deficits.

Some economists at the International Monetary Fund and elsewhere have advocated this approach, suggesting running moderate inflation rates of 4 percent to 6 percent as a partial solution to the U.S. debt problem. But the move runs the risk of damaging the dollar’s reputation and spawning much higher inflation that would be debilitating to the U.S. economy and living standards.

Of course they do. They are made up of liberals. The idea to cut back on spending never crosses their mind. Increase debt, and private spending by both individuals and companies will drop.

Rep. Brad Sherman, California Democrat, asked Mr. Bernanke directly whether the Fed would consider such a strategy, especially since IMF officials endorsed it.

“We’re not going to monetize the debt,” Mr. Bernanke declared flatly, stressing that Congress needs to start making plans to bring down the deficit to avoid such a dangerous dilemma for the Fed.

In other words, Bernanke is saying to stop spending so darned much, and get their house in order, because the Fed is not going to rescue them from themselves. Of course, the typical Democrat idea will be to, yes, raise taxes, rather than cut spending to responsible levels. They never met a tax increase that they didn’t like.

Crossed at Pirate’s Cove

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