Federal Reserve Chairwoman Janet Yellen delivered a stern warning to Congress Wednesday about the government's rising debt, warning it eventually would hurt economic growth if it is not stabilized.
At a House Financial Services Committee hearing, Rep. Steve Pearce, R-N.M., pointed out the national debt clock that Republicans run on a monitor at the sides of the hearing room and asked Yellen to comment.
"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." Yellen responded.
She said she has consistently told Congress to address the expected long-term imbalance between federal spending and revenue.
"A key thing that Congress should be taking into account ... is the need to achieve sustainability of this debt path over time," she said.
For years, Yellen, with Ben Bernanke before her, advised Congress that it should provide short-term fiscal stimulus in the form of tax cuts or spending programs, while also planning to reduce deficits in future years.
Starting at the end of last year, though, Yellen stopped calling for short-term stimulus. With the economy near full employment, she said in December, stimulus measures were no longer necessary.