Bernanke to Congress: We're Much Closer to Total Destruction Than You Think

Official Congressional budget estimates understate the peril of rising debt, Fed chair Ben Bernanke told the Budget Committee on Capitol Hill today.

Warning that our nation's fiscal health has deteriorated appreciably since the onset of the financial crisis and the recession, Bernanke called upon lawmakers to confront the long term fiscal challenges sooner rather than later. If lawmakers don't confront them, they'll find themselves confronted by them.

From Bernanke's prepared remarks:

By definition, the unsustainable trajectories of deficits and debt that the CBO outlines cannot actually happen, because creditors would never be willing to lend to a government with debt, relative to national income, that is rising without limit. One way or the other, fiscal adjustments sufficient to stabilize the federal budget must occur at some point. The question is whether these adjustments will take place through a careful and deliberative process that weighs priorities and gives people adequate time to adjust to changes in government programs or tax policies, or whether the needed fiscal adjustments will come as a rapid and painful response to a looming or actual fiscal crisis.

Bernanke explained that the Congressional Budget Office's calculations miss an important reality. As the government's debt and deficits rise, the economy will slow down—an effect not taken into account by the CBO. So, for instance, when the CBO says that federal spending for health-care programs will roughly double as a percentage of GDP in the next 25 years, it is probably being too optimistic. If debt keeps, rising, GDP will be much lower than the CBO estimates—which will mean that health care spending will be a much larger percentage of the overall economy. Read More

Perry to Bernanke: " Print More Money, It's Treason !!! "

Texas Gov. Rick Perry has only been a GOP presidential contender for a few days, but he’s already sparking controversy.

On Monday, he delivered some tough words to Federal Reserve Chairman Ben Bernanke — words that some of his critics find less than appropriate. TheHuffington Post has the quote from Perry, who was speaking in Iowa:

“[If Bernake] prints more money between now and the election, I don‘t know what y’all would do to him in Iowa, but we would treat him pretty ugly down in Texas.”

Then, he went on to say that the act of printing more money would be “almost treasonous.” Watch these comments below in a video captured by ThinkProgress:

The comments have drawn ire from liberals and conservatives, alike. ThinkProgress predictablypicks apart Perry’s comments, writing that he “appeared to suggest a violent response would be warranted should…Bernake ‘print more money’ between now and the election.”

NYU economics professor, Nouriel Roubini, though, took a much harsher approach. On his Twitter feed, he called Perry a “thug” and compared his tactics to Lenin’s (yes, the Russian revolutionary):

Tony Fratto, a former member of the Bush Administration, while not as harsh in his assessment, was also less-than-pleased with Perry’s commentary on Bernake. He Tweeted the following:

The Blaze reached out to Fratto via Twitter, asking him to elaborate on why, exactly, he sees Perry’s comments as un-presidential utterings. He responded:

Clearly, Fratto believes that Perry crossed the line. ABC News has more regarding what Perry saidfollowing these controversial comments:

“We’ve already tried this. All it’s going to be doing is devaluing the dollar in your pocket and we cannot afford that. We have to learn the lessons of the past three years that they’ve been devastating. The President of the United States has conducted an experiment on the American economy for almost the last three years, and it has gone tragically wrong and we need to send him a clear message in November of 2012 that new leadership is  coming.”

But, his statements on the Fed didn’t end there. In a follow-up interview, Perry was asked if he believes the Federal Reserve has been playing politics to assist the president. His reply?

“If they print more money between now and this election, I would suggest that’s exactly what’s going on.”

Despite the response, it’s likely that this situation will rapidly blow over. Still, it’s further evidence that candidates must be careful concerning how they market and package their ideals. One comment that is left unexplained may lead to a plethora of opposition.

(h/t The Huffington Post & The Blaze)