Rep. Michele Bachmann, R-Minn., wants to know: How in the world has the federal government not reported any increase in the national debt in 56 days?
As Federal Reserve Chairman Ben Bernanke testified before the House Financial Services Committee Wednesday, Bachmann asked how there could be no increase reported in the total debt when the government is racking up about $4 billion a day in new debt.
“After nearly 10 years as the head of the Federal Reserve, Chairman Bernanke could not answer my question today in Financial Services Committee,” Bachmann told WND.
She wondered if there’s a political motive.
“I asked whether the Treasury Department was cooking the federal government’s books as it was reported that the Feds debt balance sheet remained at $16,699,396,000,000 for 56 days straight, presumably so the Treasury Department wouldn’t officially register that once again the Congress had exceeded its legal borrowing limits.”
A debt of $16,699,396,000,000 would put the federal debt just about $25 million below the legal limit, according to CNS News.
For it to conveniently stay there for 56 straight days, Bachmann implied, strained credulity.
The lawmaker noted during Wednesday’s hearing that the U.S. government added more than $400 million in debt during Bernanke’s appearance alone.
“Knowing that, how could he explain the Treasury balance sheet officially stood still for 56 days? Apparently, ignorance is bliss, for bureaucrats,” she concluded.
After saying he had no explanation, Bernanke suggested it was one of the “unusual special measures” used by the Treasury Department “to deal with the debt limit.”
He called it one of the “various things they can do” to “give some extra space” so that some expenditures are “not being counted as debt.”
Bachmann said it, indeed, had been reported as an extraordinary measure, but to the average American, it looked like the government is clearly cooking the books.
Bernanke then acknowledged it might be an “accounting device” to “give some extra head room.”
When Bachmann asked if the U.S. has exceeded its debt limit, the head of the Federal Reserve replied, “I don’t think so.”
A clue to what’s going on may be found in a May 17 letter Treasury Secretary Jack Lew sent to House Speaker John Boehner informing him the Treasury was resorting to “the standard set of extraordinary measures” allowing the Treasury to continue to borrow and spend past the legal debt limit.
Lew expects those “extraordinary measures” to stay in place “until after Labor Day,” meaning, what the Treasury calls the “public debt subject to limit” will stay at $16,699,396,000,000 for most of the summer.
That means, while the government continues to borrow and spend an estimated $4 billion a day, the increasing debt is not recorded on the official ledger of the Daily Treasury Statement.
Bernanke blames Congress
Meanwhile, Bernanke showed little sign of letting up on his “quantitative easing” policy of pumping money into the economy.
He said he hopes to reduce the Fed’s bond-buying stimulus program later this year but only if the economy improves.
And he appeared to blame the slow economy on Congress, citing spending cuts caused by the sequester and “the debate concerning other fiscal policy issues, such as the status of the debt ceiling.”
When Rep. Maxine Waters, D-Calif., asked if federal spending cuts are damaging the economy, Bernanke appeared to agree, saying, “We’re focusing too much on the short run and not enough on the long run.”
Bachmann, as with many other conservatives, sees the Fed’s cure as part of the problem.
She cites the nation’s mounting debt as a key factor preventing an economic recovery and wants the federal government to slash spending, end borrowing and not increase the debt ceiling.
Bachmann isn’t alone.
Financial commentator and CEO of Euro Pacific Capital Peter Schiff predicts the economy is heading for a crash worse than the one in 2007 because of Bernanke’s “easy money” policies.
He noted the Fed has been trying to create a stimulus to the economy by purchasing some $85 billion a month in Treasury and mortgage bonds for seven years.
Bernanke and President Obama credit this with boosting GDP and keeping inflation low.
But Schiff says that is a mirage, because it keeps the economy “completely dependent on the ability to borrow more money that we can’t pay back,” and a day of reckoning will come soon.
“We’re broke. We owe trillions,” he said. “Look at our budget deficit; look at the debt to GDP ratio, the unfunded liabilities. If we were in the Eurozone, they would kick us out.”