US Federal Reserve chairman Ben Bernanke warns that the US debt ceiling should NOT be used as a bargaining chip.
Yet he goes on to talk down on the supposed nasty implications of NOT raising the debt ceiling
From the UK’s Telegraph,
Federal Reserve Chairman Ben Bernanke said the US could lose its AAA credit rating and create a new crisis in the financial markets if it does not raise the cap on government debt.
Mr Bernanke warned that if the $14,300bn (£8,784bn) debt ceiling was not lifted quickly there could be disastrous consequences.
"Even a short suspension of payments on principal or interest on the Treasury's debt obligations could cause severe disruptions in financial markets and the payments system, induce ratings downgrades of US government debt, credit fundamental doubts about the creditworthiness of the United States, and damage the special role of the dollar and Treasury securities in global markets in the longer term," he said.
American journalist and libertarian H. L. Mencken once wrote,
The whole aim of practical politics is to keep the populace alarmed (and hence clamorous to be led to safety) by menacing it with an endless series of hobgoblins, all of them imaginary.
By putting pressure on the opponents to raising the debt ceiling, Mr. Ben Bernanke is essentially saying,
I am the only person entitled to do politics, because I am the expert and everybody else does not know what they are talking about.
Apparently Mr. Bernanke is using 'fear' from 'hobgoblins' as leverage to reach a political compromise.
Of course, we also know how much of an expert Mr. Bernanke is considering his highly inspirational track record.
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