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Federal Reserve Chairman Ben Bernanke is not a fan of the U.S. debt ceiling, an arbitrary borrowing limit set by Congress.
"I think it would be a good thing if we didn't have it," Bernanke said, speaking at the University of Michigan on Monday. But he added that the chances seem slim that Congress would ever get rid of it. "I don't think that's going to happen," he said.
The United States officially hit its $16.394 trillion legal debt limit on Dec. 31. As a result, until the debt ceiling is raised, Treasury is not allowed to borrow new money to help it pay all the country's financial obligations.
In the meantime, the Treasury Department has resorted to "extraordinary measures" to keep paying Uncle Sam's bills. Treasury Secretary Tim Geithner has said he expects those measures to run out between mid February and early March, setting the stage for yet another fight on Capitol Hill.
Bernanke spoke about the misconceptions surrounding the debt ceiling. Contrary to Republican rhetoric, which has suggested that raising the debt ceiling is akin to opening up the spending floodgates, he said it merely allows the government to continue paying its current bills.
He compared not raising the debt ceiling to a family of debtors skipping out on their bills.
"This is sort of a family saying, 'we're spending too much, let's stop paying our credit card bill.' That's not the way to get yourself in good financial condition," he said.
In the case of the U.S. government, those bills include for example, payments to federal contractors, paychecks for the military, Social Security checks to seniors and interest on the debt to bond investors. This is spending that has already been approved by Congress.
"Raising the debt ceiling gives the government the ability to pay its existing bills," Bernanke said. "It doesn't create new deficits. It doesn't create new spending."
Republican lawmakers have been using the debt limit as a leveraging tool, as they negotiate spending cuts and reforms to Medicare and Social Security with President Obama.
"The consequences of failing to increase the debt ceiling are real, but so too are the consequences of allowing our spending problem to go unresolved," said House Speaker John Boehner in response to comments by President Obama, earlier Monday.
Bernanke has long advocated that Congress focus on cutting the deficit over the long term, without choking off the already weak economy. He reiterated that plea to lawmakers Monday.
"I'm not saying that deficits and debts are a good thing, but the way to address it is to have a sensible plan for spending and a sensible plan for revenue," he said.
- CNNMoney's Jeanne Sahadi contributed to this report
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