Bernanke: Debt limit should be scrapped

The Hill

Federal Reserve Chairman Ben Bernanke on Monday said the debt ceiling has no value to the United States and should be scrapped. 

"It would be a good thing if we didn't have it," the Fed chairman said at the University of Michigan. 

Bernanke acknowledged, however, that that charged politics surrounding the debt likely mean the borrowing limit is here to stay.

The powerful Fed chairman has repeatedly urged Congress to avoid putting the U.S. economy and its financial reputation at risk with long-running fights over the debt limit, which stands at $16.4 trillion. 

The last showdown over the debt limit in 2011 resulted in the first-ever downgrade of the nation’s credit rating and wreaked havoc on financial markets.

The Fed chief said the argument in Congress about the debt ceiling misses the point, because the increase in borrowing authority simply accommodates the spending lawmakers have already approved.

"This is sort of like a family saying, 'Well, we're spending too much, let's stop paying our credit card bill,' " he argued.

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