Federal Reserve Chairman Ben Bernanke said on Wednesday Congress needs to develop a plan to manage the nation’s burgeoning debt, because the federal budget “appears to be on an unsustainable path.”
Testifying before the House Budget Committee on the state of the economy, Bernanke urged lawmakers to take decisive action to show investors that the country can get back on the right financial path. But he did not offer any specific remedies.
As Congress prepares to take up emergency spending legislation in the next few weeks, the deficit has created a “structural budget gap that is both large relative to the size of the economy and increasing over time,” Bernanke said.
“We need to convince markets in the medium and longer term that we have a sustainable fiscal path for balancing our budget or at least bringing our deficits down,” he said, later adding “medium-term” means three to five years down the road.
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