Budget Deficit Threatens to Reduce U.S. Economic Growth, Bernanke Says

Federal Reserve Chairman Ben S. Bernanke said the growing U.S. budget deficit could push borrowing costs higher and curb economic growth.

“The long-term unsustainability of our debt is a significant problem because it threatens higher interest rates, less confidence, and it could have impact on the current recovery,” Bernanke said in response to a question from the Senate Banking Committee.

“I have been urging Congress to address these problems not just in the current fiscal year, but looking over a longer time frame, because it is in fact over the next 10 or 20 years that these problems are going to be extraordinarily pressing,” Bernanke said.

When asked if the debt is a top priority for lawmakers, Bernanke said, “over the long term, certainly. It certainly must be addressed to get us back on a sustainable path.”

To contact the reporters on this story: Steve Matthews in Atlanta at smatthews@bloomberg.net;

To contact the editor responsible for this story: Christopher Wellisz at cwellisz@bloomberg.net

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