Ben Bernanke, former Federal Reserve board chairman and a current fellow at the Brookings Institution, believes that sequester-level cuts in the defense budget are indicative of “bad economic policy,” the Fiscal Times reported Monday.
Rob Garver writes that Bernanke noted a potential mismatch between the cuts to near-term spending and the management of the long-term factors that drive the national debt and budget deficit.
“We should be making our decisions based on medium-term considerations, based on what make the most sense for efficiency, in terms of achieving our objectives,” Bernanke said at a recent Brookings-sponsored event.
“There’s no reason for draconian steps right now that will have long-run costly implications for our defense posture just for deficit reasons.”
He added that the deficit is projected to remain at a relatively stable level over the next 10 years, Garver reports.
Andrew Clevenger also reports on Defense News that Bernanke pointed to the purchasing power parity method as a means to understand the context for U.S. defense spending to ensure military preparedness.
“In the end, in thinking about the size of the military and our resource expenditures, we need to think about our foreign policy goals, the threats we might faces, the capacities we need to develop and ultimately, of course, the long-term budget constraints that we do face,” Bernanke said.