UH OH

Economy Hits the Brakes

You mean we have to pay for this stuff? Skyrocketing deficits in America and around the world designed to help counter the recession could sap global economic growth for years to come as rising interest rates force countries to pay more each year to finance their debt. A one point increase in interest rates could cost the U.S. another $50 billion per year thanks to its rising national debt. The prospect of prolonged stagnation thanks to the deficit prompted Federal Reserve Chairman Ben Bernanke to warn Congress on Wednesday that it needed a plan to get its budget under control once the need for emergency economic spending has passed. "Even as we take steps to address the recession and threats to financial stability, maintaining the confidence of the financial markets requires that we, as a nation, begin planning now for the restoration of fiscal balance," Bernanke told lawmakers.