Bill Wilson, ALG:
Currently, the $14.2 trillion national debt already stands at 95.5 percent of the nation’s $14.8 trillion Gross Domestic Product (GDP). While it is unclear at what percentage of debt-to-GDP that the debt will become too large to refinance, the warning signs are already there that we cannot even meet our current obligations honestly.
Pimco reports that in 2009, 80 percent of treasuries were purchased by the Federal Reserve, and in 2010, it had to buy 70 percent, bringing its current U.S. debt holdings to $1.3 trillion. As a result, the Fed is the largest lender to the U.S. government in the world — all with printed money — more than China or Japan. When the Fed ends QE2 in June, it will likely keep a high water mark of $1.5 trillion in treasuries holdings.
Printing money to refinance the debt cannot continue for long without very severe consequences, including a potential collapse of the dollar as the world’s reserve currency, hyperinflation, and a complete default on the nation’s obligations. The time to pass the Balanced Budget Amendment is now, before it is too late and it becomes impossible for the debt to ever be repaid.
The Balanced Budget Amendment being proposed, once implemented, will make it possible that for the first time since 1957, the national debt can be reduced. This must begin to occur to reassure the nation’s creditors that the U.S. intends to honor its obligations with real money, not with a “pretended payment” that economist Adam Smith warned against.
With the upcoming vote on increasing the national debt ceiling above $14.294 trillion, now is the opportunity to use your leverage not just to get an up-or-down vote on the Balanced Budget Amendment, but to get it adopted. To do so, we urge you to take your case directly to the American people, who will join with you in fighting to make certain that another increase in the debt will never again be necessary.
The American people must be advised of these cataclysmic risks of inaction. There is a very dangerous misconception that the nation can just continue borrowing and printing money perpetually. It cannot. Nor will it long endure as the world’s foremost economic and military superpower if it tries to.
Besides a failure to meet our fiscal obligations, a national default will mean that the U.S. will be unable to meet its security obligations around the world, destabilizing whole regions, and threatening national security. It is likely for this reason that Chairman of the Joint Chiefs of Staff, Admiral Mike Mullen, described the debt as the number one danger facing America.
This is where we stand.
And yet we’re being beaten back, in our leadership, by an alliance between dottering Democrat hacks trumpeting the necessity of federally-funded cowboy poetry festivals and weak-kneed Republican neo-“mavericks” who think that de-coupling abortion huts from the federal tit is unnecessarily provocative and extreme.
Seems like we extremists have yet to put enough of a boot up certain pasty white elephant asses.
Lace up, people!
I am 100% behind this amendment, but we all need to keep in mind that this is a 5 – 10 year process if ever. Our Congress could choose to starting governing this way today; it would be best thing for the economy, the country, and the vast majority of Americans. Bad for the progs, though, so they will fight it by any means necessary. Today is probably already too late, waiting 5-10 years, or 20 as Reid would have us wait, is simply out of the question. If anyone has any doubts about that you might go back through Monty’s posts at Ace’s, through the VC analysis of USA Inc. Jeff has previously posted on, or the work of Pete Peterson’s group.
We need this amendment, and we need to start governing as if it were law.
We’ve only just begun. Let’s not forget that we’ve got a long way to go.
Too little, too late, methinks.
Before we can get some backbone into the beltway GOP, the federal government will have lost its ability to govern the states and the enclaves inside the states that have formed ad hoc jurisdictions to protect themselves from Teh Crazee.
Maybe that Russian dude was right about the fracturing of the U.S.
Anyone want to start a flag-design contest for the new subnations of the USA?
I suggest a simple white one for RNC HQ.
All with interest-bearing printed money. And today we learned the the US Fed’s recent beneficiaries have included almost nothing but non-US banks. Including Libya and China. While the most powerful (spokes)man in the world
lied aboutconcealed it.In other words, just what all us RON PAUL! goldbugging hicktards have been saying for, oh, forty years: A globalist cabal holds the world’s purse strings, fulfilling folks like Thos Jefferson and even some moldering Rothschild dude on money, liberty, and power.
And still we will not learn.
Money IS debt, and as the Ponzi machine runs, it siphons off everything from us we think we stand for. This money is servitude.
Team R? Largely unperturbed. “Saving” what amounts to lunch money on any given Monday in order to placate a people just as comfy living in somebody else’s dependency scheme in an international net nobody cares about monitoring for its fealty to classical liberty.
Of which it has precisely none.
Since the hyperinflations are coming, I’m going to DisneyWorld. Might as well – their prices are coming attractions to a mall near you.
I enjoyed Bill Whittle’s video about the budget.
I’ve got to agree with motionview. A balanced budget amendment is a great idea, but we don’t have the time. Moody’s Investor’s Services is predicting that we’ll hit the fiscal wall, experiencing a “debt shock” sometime between 2013 and 2018. At that point investors will lose confidence and simply won’t be willing to buy US securities without drastically higher rates of return, sending to cost of financing the debt spiraling out of control. The federal government will effectively run out of Other People’s Money. And then..
I seriously suspect that it’s already too late to avert the crisis, but if there’s any chance we need Congress to grow up and start acting responsible now. They need to balance the budget, not dither with a balanced budget amendment that promises to balance the budget later.
As a volunteer Guardian ad Litem, I attended the national CASA conference in Chicago last week – a 4 day event of workshops, a banquet, luncheons, and of course – plenty of national level speakers. It was a running “joke” among the speakers that “our nation is broke” – guaranteed to get a hearty guffaw out of the largely left-leaning (ahem…social services) crowd. They just WILL NOT accept it. They buy the Michael Moore logic of us as a wealthy nation. [I agree with JD: Bill Whittle and Iowahawk put a very useful lie to that notion]
For an organization whose entire mission is the advocacy of children – you’d think they would want to hand the little ones a future.
We gotta start somewhere, Swen.
I wonder how many people would deferr their social security payments for a couple of years after they reach retirement age.I know I’m looking down the barrel of 60 and I’m willing to give it a shot.