US Federal Reserve Chairman Ben Bernanke (file photo)
Source: Press TV
US Federal Reserve Chairman Ben Bernanke has warned that an EU-type economic crisis is headed for the US economy if it fails to curb its debt issue, Press TV reports.
“Risks remain that developments in Europe or elsewhere may unfold and could worsen economic prospects here at home,” Bernanke said this week, a Press TV correspondent reported.
The Fed chief also suggested that eventually the government's increasing debt would inhibit the growth of the country's economy.
Experts think the US economy will dip into another recession in 2012 as the US Treasury report to congress forecasts the government's debt will rise to 19.6 trillion dollars by 2015.
The Congressional Budget Office reported that the US federal budget deficit will exceed USD 1 trillion at the same time as the US debt which is now more than USD 15 trillion and growing daily. The country's annual economic output now equals about the same as the debt level.
There are fears that more delays in resolving the eurozone debt crisis, which began in Greece in late 2009 and infected Italy, Spain and France last year, could push not only Europe but also much of the rest of the developed world back into recession.
Meanwhile, the US unemployment rate remains above 9 percent. Many economists, however, believe that the true unemployment rate is around 20 percent.
This has resulted in the Occupy protests that continue to rage across the country against the US's financial inequalities.
The Occupy Wall Street (OWS) movement first began on September 17 in the financial district of New York City to protest at a number of issues including the US financial crisis, rising poverty, soaring unemployment, and high bonuses for Wall Street executives.