Today Federal Reserve Board Chairman Ben Bernanke spoke in front of the 'Committee for a Responsible Federal Budget' annual conference. His advice; using the debt ceiling as a political tools will cause more harm than good for the economy and U.S. fiscal credibility because of the potential risk of debt "default".
Rick Santelli of CNBC provides information on the other side of the story. Specifically, he states default refers only to non-payment of bond holders, for which there is enough money regardless of debt ceiling limitation. This is a possible suggestion that not raising the debt ceiling doesn't necessarily have to lead to default. The implication is the debt ceiling default is a scare tactic.
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