Bernanke Issues Deficit Warning
Author: Jon Hilsenrath</br></br>For months the Federal Reserve has been plotting a strategy to exit from its easy money policies while promising that it won't do so for a while.</br></br>On Wednesday, Fed Chairman Ben Bernanke urged lawmakers to take the same approach with the budget deficit: Devise a plan now, but act on it later.</br></br>In testimony to the House Budget Committee, Mr. Bernanke said that having a credible deficit-reduction plan in place "will help keep interest rates down and help growth" in the near term, but indicated the economy was too fragile to start cutting the deficit now.</br></br>Advancing a theme he has emphasized in the last few months, Mr. Bernanke said that if Congress pursued more fiscal stimulus to sustain the recovery, it should be accompanied by a concrete plan to bring the deficit back into line in the long run. Without a fiscal "exit strategy," he said, the U.S. could, "in the worst case," see financial instability like in Greece.