Hoenig Says Fed’s Objectives Threatened by U.S. Debt

Bloomberg:
Federal Reserve Bank of Kansas City President Thomas Hoenig said the U.S. must take “difficult” steps to reduce spending and increase revenue so the central bank isn’t pressured to fund the “unsustainable” federal debt.

The Obama administration estimates budget deficits will total $4.3 trillion during the next five years and hit a record $1.6 trillion in the year ending Sept. 30. The U.S. must be “willing to disappoint a host of special interests” and tackle the debt, or it risks “its own next crisis,” Hoenig said.

“A government faced with rising debt levels must provide a credible long-term plan to re-establish fiscal balance,” Hoenig said in remarks at a policy forum hosted by the Peterson-Pew Commission on Budget Reform.

Hoenig said the plan should include “controlling budget earmarks, trimming subsidies to numerous economic sectors and resolving our banking problems and the perception that Wall Street is favored over Main Street, all of which would otherwise foster mistrust and cynicism among the public.”

The U.S., to curtail the debt, should choose the option that’s the “most difficult and probably the least palatable politically: We can act now to implement programs that reduce spending and increase revenues to a more sustainable level,” Hoenig said.

“I recognize that this last option involves hard choices and short-term pain,” Hoenig said. “However, in my view it is the responsible path to sustainable economic growth with price stability.”

Hoenig, 63, is the longest-serving Fed policy maker, having been the Kansas City bank’s president since 1991. At last month’s Federal Open Market Committee meeting, he cast the lone dissenting vote, objecting to language in the statement indicating interest rates will remain low for an “extended period.”

HELLO!! Is anyone listening? KEY PHRASE: The U.S. must be “willing to disappoint a host of special interests” and tackle the debt, or it risks “its own next crisis,” Hoenig said.
 
Our grandchildren desperately deserve someone that listens and acts on their behalf versus the usual congressional "its all about me" club. Thank you Mr. Hoenig! Did you happen to send a copy of your speech to Bernanke, Geithner and the putz group elected to represent the citizens of the country?