We can either act to pass a balanced budget amendment this year — the only way to ensure Congress will act — or China and others will force upon us a more abrupt and painful balanced budget.
In August of this year, Admiral Michael Mullen, chairman of the Joint Chiefs of Staff, advised Congress that “The National debt is the biggest threat to our national security.” In November, voter sentiment against the debt and deficit led to an historic rebuke of Congressional incumbents. In December, the President’s Debt Commission laid out in stark terms the imminent economic impact of continued deficit spending. Apparently rejecting these clarion calls, the President and Congress acted in the lame-duck session to cut not one dime of federal spending, while increasing the national debt by nearly $1 trillion. They are ignoring a glaring problem that, if not addressed soon, will cause a panoply of other problems.
Some insist that the problem with increasing the debt by nearly $1 trillion is that the borrowed money will be loaned to us by China. ……..What ought to be of even greater, more immediate concern is the fact that China will refuse to loan us the money.
The economic threat from China and other foreign countries loaning us trillions of dollars is like falling off the Empire State Building. It isn’t the fall itself that kills you… it’s the sudden stop.
One option would be to continue borrowing wildly, like the PIIGS, until the bond markets simply proclaim, “No more!” The ensuing lack of confidence hit the PIIGS economy, causing unemployment rates in those countries to double over the last three years to an average of 13.3%. (Spain’s unemployment is now over 20%).
The need has never been greater for the U.S. to balance its budget by cutting spending. But as the President and Congress have once again shown, it simply will not take that difficult step unless it is forced to do so.
Set aside for a moment the threat of the U.S. debt crippling our children decades from now or our grandchildren a generation from now. With China unwilling to loan the U.S. additional money, and the rest of the world likely unable to loan us enough money, the debt threatens to cripple our economy now.
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