Fed Chairman Warns About Sustainable Fiscal Policy

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Bernanke's speech yesterday makes the case for political agreement on a sustainable fiscal policy. He argues that whatever we do, it should avoid harm to our fragile recovery. In particular, using the debt ceiling as weapon in fiscal policy deliberations may harm the recovery in many ways. He acknowledges that the battle over fiscal policy reflects differences in social values and that decisions will not be easy. Our first objective, however, should be to avoid harm.