Yellen: Congress Should Factor National Debt into Policy Decisions
Last Updated July 12, 2017
During testimony before Congress on Wednesday, Federal Reserve Chair Janet Yellen emphasized the need for lawmakers to consider the rising national debt — and its unsustainable trajectory — when considering policy choices.
In response to a question about the financial risks posed by the national debt from Congressman Steve Pearce (R-NM), Yellen said:
"Let me state in the strongest possible terms: I agree that what you're showing here represents a trend that, given current spending and taxation decisions, is going to lead to an unsustainable debt situation, with rising interest rates and declining investment in the United States that will further harm productivity growth and living standards. I believe a key thing that Congress should be taking into account when designing fiscal policy is the need to achieve sustainability of this debt path over time.”
Watch a clip of the full exchange above, or learn more about the key drivers of our growing debt.
Photo by Zach Gibson/Getty Images
Further Reading
Long-Term Budget Outlook Leaves No Room for Costly Legislation
As lawmakers consider costly legislation to extend expiring tax provisions this year, CBO’s latest projections serve as a warning that our fiscal outlook is already dangerously unsustainable.
Moody’s Warns Recent Policy Decisions Worsen U.S. Fiscal State, Maintains Negative Outlook Rating
Moody’s says that the United States is in fiscal deterioration, warning that government policy decisions in the near term could contribute to higher interest rates and worsening national debt.
National Debt Would Skyrocket Under TCJA Extension
New analysis released from the nonpartisan CBO shows deficits doubling and debt skyrocketing under a scenario where the expiring provisions of the Tax Cuts and Jobs Act were made permanent.