Fed chair warns that Europe’s debt crisis holds lesson for America

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Fed Chairman Ben Bernanke told the House Budget Committee that a continued increase in consumer spending and business investment should make up for a fading government stimulus in lifting the economy.

However, since economic growth alone won’t be strong enough to repair the country’s finances, Mr. Bernanke once again told U.S. lawmakers that action must be taken to reduce the deficit. He underlined that Europe’s sovereign debt woes point to the importance of maintaining sound government finances.

“To avoid sharp, disruptive shifts in spending programs and tax policies in the future, and to retain the confidence of the public and the markets, we should be planning now how we will meet these looming budgetary challenges,” Mr. Bernanke said in prepared remarks.

Full Story: Bernanke Warns About Deficits –