Bernanke: Large fiscal deficit unavoidable

The enormous fiscal budget deficit is unavoidable to help the economy recover, Federal Reserve Board chairman Ben Bernanke said Tuesday. "We are better off moving aggressively today to solve our economic problems; the alternative could be a prolonged episode of economic stagnation that would only contribute to further deterioration in the fiscal situation," Bernanke told the Senate Budget Committee. Congress is holding several hearings Tuesday on President Obama's $3.6 trillion budget blueprint for fiscal year 2010Bernanke said recent economic indicators indicate "little sign of improvement" in the economy. The rising number of workers filing for state unemployment have moved higher "suggesting that labor market conditions may have worsened further in recent weeks," he said.

Bernanke: Large fiscal deficit unavoidable.

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With the FDIC close to insolvency at what point does the US Treasury become bankrupt? Yes, they can keep printing money. I think at this point it is not yet inflationary because it is filling in huge monetary holes, but when it becomes so, and when interest rates start to creep up and bond prices fall then I think we may see real pressure on the US dollar.