Fiscal policy is of critical importance, as I have noted today, but a wide range of other policies--pertaining to labor markets, housing, trade, taxation, and regulation, for example--also have important roles to play.
Bernanke highlights the importance of various policies beyond fiscal policy.
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making derivatives safer is very important, part of solving Too Big to Fail and preventing another financial crisis.
It is also important, of course, for community banks to be well-capitalized so that they can continue to lend during difficult periods.
It would be very concerning for financial markets and, I think, for the general public if the United States didn't pay its bills.
Large deficits in debt over a long period of time raise interest rates above levels where they normally would be and crowd out private investment and are bad for growth and productivity.
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