The Debt, the Deficit, and the Federal Budget :: Nan Hayworth for Congress in NY-19

NAN ON THE ISSUES

The current Congress has demonstrated no discipline in its management of the federal budget. The federal deficit has increased substantially this year, and it is projected to rise exponentially next year. Projections of the public debt range from 60% to nearly 100% of gross domestic product in 2010, the highest level since World War II. If this trend continues, one of three outcomes is inevitable:

The Federal Reserve will be forced to raise interest rates to unconscionable levels, severely constricting the flow of capital and the resources needed to create growth, wealth and jobs;
Our nation will be forced to default on its debts; or
We'll see something just as unthinkable, but more insidious: massive inflation of our currency, the cheapening of our debt, the weakening of the dollar and the erosion of our purchasing power, savings, and retirement accounts.

The Dangers if It Doesn't

A significant portion of our nation’s debt is carried by foreign investors – principally the People’s Republic of China. As we borrow more money from abroad, our financial independence as a nation declines. The United States will become increasingly susceptible to the policy dictates of our creditors. We will lose our leverage to promote democracy abroad, to hold other nations accountable on human rights, to advocate for market-based economies and the rule of law, to sanction rogue states, and even to provide assistance to key allies in critical areas around the globe.

Should our creditors’ doubts about the Treasury’s ability to repay the debt increase, our country faces the real risk of defaulting on the debt. The threat of this eventuality has already weakened the American Dollar, and the grim possibility of replacing it with another reserve currency has been discussed internationally.

Even if the direst scenarios do not come about, the immutable law of compound interest will make the debt intolerably costly to future generations of Americans, ensuring downward mobility and robbing them of the fullest chance for the prosperity that has always been the promise of this great country.

A Tsunami of Red Ink Is Looming

The Office of Management and Budget recently predicted that the national debt will increase by $9 trillion over the next decade. Some estimate this figure closer to $14 trillion. Given these risks posed by massive borrowing, we cannot continue our current course. Bank and corporate bailouts, an expensive “stimulus” that has proven worthless, and a new health care law that promises a vast new array of entitlements and increased bureaucratic bloat cannot be accommodated by a federal government already struggling under the cost of existing entitlements and two wars.

Let’s Turn Back from a Disastrous Course

To reverse the disastrous course we face due to deficit spending, our government must spend less. Debt reduction is not only the optimal fiscal solution; it will also put resources back into the pockets of the citizens and empower them to revive the world’s greatest economy:

Immediately freeze the “stimulus” program and disburse no further funds.
Freeze non-military discretionary spending and terminate, privatize, or defer to the states programs not essential to fulfillment of the federal government’s constitutional responsibilities.
Require that the annual federal budget disclose and account for the long-term costs of entitlements that have previously been left off the balance sheet, so that we have a realistic accounting of the government's obligations.
Reject any further requests for bailouts from companies “too big to fail.”
Enact a statutory limitation on increases in federal spending, tied to the rate of inflation and population growth.