The head of the US Federal Reserve has acknowledged that current economic policy is not "sustainable" – but that it is wrong to fix it.
Speaking during testimony before the Joint Economic Committee of Congress on November 13, Omer Powell noted that at present, US national debt is growing faster than nominal GDP.
Powell: Solving Debt Spiral "Doesn't Depend on the Fed"
"After all, it's not a sustainable place," he said. Powell continued:
"How to overcome it – it's easy to say – how you do it and when you do it is a problem that is up to you, not us."
As Cointelegraph reported, US debt has now reached $ 23 trillion – about $ 70,000 per capita, or more than $ 1 million for every Bitcoin that will ever exist.
Only the night of November 14, Fed distributed banks' assets worth BTK 12.7 million, while its balance sheet expands to $ 4 trillion.
For Powell, though, resolving the debt crisis simply means making growth to beat debt, and even failing to do so would not equal chaos.
"I'm sorry not to stress that the consequences of not solving it are just that … our children and grandchildren will spend their tax dollars on debt servicing rather than the things they really need," he continued.
Trump wants negative interest rates
The comments came after US President Donald Trump renewed calls for negative interest rates – effectively charging savers to save Fiat currency – and criticized the Fed for not introducing them.
"Remember, we are competing with nations that openly lower interest rates, so now many are paying off when they pay off their loan … who ever heard of such a thing? Give me some of that, give me some of that money, "he said in a speech to the New York Economic Club.
Debt-driven economic policy and its consequences were the main motivation behind Bitcoin (BTC), which emerged after the 2008 economic crisis.
As hard currency with deflationary supply is impossible to manipulate, Bitcoin is increasingly being compared to gold as a hedge against the constant erosion of the value of Fiat currencies.