Ben Bernanke, the chairman of the Federal Reserve warned the Republican Lawmakers in a statement released on Wednesday that if the debt limit of the US is not raised from its current 14.3 trillion dollar stand without further delay, the consequences could be catastrophic.

Mr. Bernanke also said talking in the National press club that after a certain point the US would have no options left but to default on all its debt as what policy they are following is very much probable to lead them to such a situation. He also added that if anything such as this really happens then the effect on the country’s fiscal policy, economy and financial system would be devastating.

The chairman of the Federal Reserve also said in his speech also made a call to the President of United States and his administrative body and to the congress to implement a plan credible and effective enough to put a stop on the rising budget deficits. He in fact presented a more optimistic and euphoric picture of the current economic scenario than he did in any of the earlier statement but at the same time he made its clear that the complete recovery though very much on the cards can only be achieved with the diligent support of the Feds.

Few of the Republican Heads intend to put into use the need to push the statutory debt ceiling as the leverage for cutting spending. The Obama govt. though hinted that the US would likely hit the limit anytime between early days April or the later days of May. The real concern is the failure of the congress to raise the limit in a timely fashion. If so happens the Govt. would be put into a position where it would be forced to pull back operations. It could also result in a first ever US debt-default and make interest rates go sky high.