Barnaby and Bernanke agree on debt

Irresponsible!
This is the cry by Messrs.  Rudd and Tanner when Senator Joyce warns Australian citizens about rising US government debt and suggests that we are heading down a similar path.

US Fed Chairman Bernanke, in a rare display of candour, transparency and intelligibility has testified before Congress that US debt is too high and risks damaging the American economy in the very short term. He warned that the United States could soon face a debt crisis like the one in Greece.

Thank you Mr Bernanke for your fulsome support of Senator Joyce’s analysis. I look forward to hearing Mr Rudd’s withering denunciation of Mr Bernanke’s irresponsibility.

The recent shake up of Mr Obama’s economic advisory team saw Mr Bernanke on thin ice. He came very close to being replaced. It would seem Obama has extracted a committment from him to be more honest and forthcoming with the American people.

As reported in The Washington Post,  Mr Bernanke said,  “It’s not something that is 10 years away. It affects the markets currently,” he told the House Financial Services Committee. “It is possible that bond markets will become worried about the sustainability [of yearly deficits over $1 trillion], and we may find ourselves facing higher interest rates even today.”

Mr Rudd and Mr Tanner are intelligent men, however misguided they may be about the best way to run the country. They know very well that US debt is shooting to the moon. They know very well that a US debt crisis would not only raise US interest rates but induce a re-pricing of money worldwide. Australian rates too would rise but the impact would be very significantly softened if we were still in the debt free position bequeathed to us by the Howard/Costello Government. Rudd and Tanner treat Australian citizens as cattle, afraid to speak the truth in case it starts a stampede. This is an insult to the intelligence of the Australian people and is the greatest mistake a politician can make.

Australians are in the mood for some straight talking. Well done Senator Joyce.

Reference:  http://www.washingtontimes.com/news/2010/feb/25/bernanke-delivers-warning-on-us-debt/