Two Fed Officials Offer Different but Upbeat Views on Debt

The soaring US deficit, estimated at over US$600 billion last year, has been a source of debate among economic analysts. According to The New York Times, the nation's total foreign debt equals more than one-fifth of the total economy. And while many observers fear the increasing indebtedness could eventually lead to global economic disaster, two senior officials at the US Federal Reserve Board suggest otherwise. Neither Alan Greenspan nor Ben S. Bernanke seem overly concerned over the debt situation. In fact, Bernanke suggested in a recent speech that a so-called "global savings glut" precipitated the trade imbalance. Both Fed members remarked that ultimately the situation would resolve itself with time – a prospect of which many critics remain skeptical. – YaleGlobal