TheHill.com reports that the Federal Reserve chairman was asked for his views on the debt ceiling during an appearance yesterday at the University of Michigan. ‘It would be a good thing if we didn't have it,’ Bernanke said, adding that the current $16.4 trillion debt limit makes no sense in view of current federal spending. ‘This is sort of like a family saying, 'Well, we're spending too much, let's stop paying our credit card bill.'’
When asked if the debt ceiling had any value, Bernanke responded, ‘No, it doesn't really have – it's got symbolic value, I guess.’
Bernanke also rejected a controversial proposal that would enable the U.S. Department of the Treasury to mint a $1 trillion coin and deposit it with the Federal Reserve, thus allowing the continued funding of the federal government.
‘I'm not going to give that any oxygen,’ Bernanke said. ‘There are legal issues, there are policy issues – I don't think going in that direction would be very helpful.’