'Apocalyptic pain' from an out-of-control debt could cause 18 percent unemployment and a massive contraction in the economy that would destroy the middle class, a leading Republican deficit hawk said in an interview that aired Sunday.[...]Sen. Tom Coburn, R-Okla., who recently issued a report on government waste, warned that the U.S. only has about three or four years to get its fiscal house in order or it could find itself facing austerity measures seen in Greece, Ireland, Spain, Portugal and earlier in Japan.
'The history of republics is they average 200 years of life. And they all fail in the history over fiscal matters. They rot from within before they collapse or are attacked,' Coburn told 'Fox News Sunday.'
'The problem that faces our country today, the last 30 years we have lived off the future, and the bill is coming due,' he added.
[...]
'I think you'll see a 15 to 18 percent unemployment rate. I think you will see an 8 to 9 percent decline in GDP. I think you'll see the middle class just destroyed if we don't do this. And the people that it will harm the most will be the poorest of the poor, because we'll print money to try to debase our currency and get out of it and what you will see is hyperinflation,' Coburn said.
'If we didn't take some pain now, we're going to experience apocalyptic pain, and it's going to be out of our control. The idea should be that we control it,' he said.
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'I don't care if you're rich or poor, liberal or conservative. If we don't fix the problems in front of us, everybody is going to pay a significant price,' he said.
If the Republicans can't get the Country's finances back in shape in the next couple of years, what has been happening in Europe could be headed our way according to Coburn. You use to only hear this type of dire prediction by talk show hosts. Now it is coming from our Senators. Senator Coburn did pledge to not run for another term, so maybe that is why he is willing to be so honest about the situation our Country faces. America is special and we don't have to worry about the fate that has befallen other nations in the past as noted above. Our government is like the con artist who gets a loan and then pays for this loan with another loan and so on. (My economic textbook said that national debt is not anything to worry about as the government can just roll over its debt and pay for its existing debts by issuing more debt in the form of treasuries. But if the markets loose faith in the governments ability to pay back that debt, they will demand higher interest rates which will make the cost of servicing this debt prohibitive. This is what happened in Greece and Ireland.) It seems as if the economic con game that is our nations economy is coming to an end of sorts. Pain is about to befall us. Stay out of debt.
The entire article sums up a lot of my feelings. From working in the governmet for over five years now, I've witnessed the extensive government waste. This is nothing new to any of us.
ReplyDeleteSpeak it, Dr No!
ReplyDeleteWhat is the new is the fact that a Senator is making such dire predictions, although it is stated in terms that could be called over dramatic. Paul Ryan is also saying similar things in a less dramatic form. Before you would only such predictions from the talk show hosts or sources that are perceived to be not creditable.
ReplyDeleteThe economic problems can't be solved with cuts in government spending alone. Cuts of the magnitude that would be necessary to have any meaningful impact on the debt crisis that America is facing will not be possible because if they were enacted they would cause riots and the politicians making those cuts would be voted or thrown out of office. Imagine having your beloved GI BIll taken away or reduced. You earned that shit. Right? Well everybody else feels that same way about their welfare, social security, medicare, unemployment insurance, state subside college tuition, and etc. (There is a massive education bubble in the form of student loans that is approaching 1 trillion dollars. This is another massive bubble that will pop.) Making people having to work for a living will piss off a people conditioned to believe that they are entitled to not having to work.
They are predicting 5 dollar gas.
America will face a situation like that of the EU with its several states that will go bankrupt.
It looks like the housing market might be going back into a double dip. I would benefit from such a thing.
Economic pain is headed our way and is here for millions of Americans. Saying that the economy will have a collapse of some sorts used to be considered unfathomable. Now it is becoming more of an accepted fact as noted by the fact that Senators and Congressmen saying so.
I am sure all of the people that lived in the past and experienced an economic collapse did not believe such a thing was possible until it fell upon them and they had to deal with the reality. Most people won't know or care until such a time.
ReplyDeleteBetter start stockpiling your canned foods!
ReplyDeleteYou say that in a joking manner, but it is actually a good ideal to have a least a couple weeks worth of food at your home in case of natural disasters, if you loose your job and source of income, or any other reason. Especially if you have a family.
ReplyDelete