Should Congress Spend More? The Answer Is In.

All questions about whether Congress should spend more money on any new programs were answered this week. All such discussions should end and the nation should be focused on the number one problem that literally threatens our national security and survival as a nation. With a single document this week, the Congressional Budget Office (CBO) has likely altered the course of all international business, foreign government currency rates, the ability of the US to borrow on the international markets, and our own government’s outlook for financial stability. That is an astonishing accomplishment for a single report. While not entirely unexpected by most in the financial community, the CBO just announced that the White House projections for the size of the governments accumulated budget deficits during the next 10 years, were misstated by two trillion dollars. Let me write that out in zeros. That is $2,000,000,000,000. An error of that size is literally inconceivable. In fact, it is unlikely that it was an error, but an intentional misstatement of our massive problem as the White House and Congress raced to get their healthcare and other budget agenda items passed before the Congressional recess and before the CBO could release this news to the nation.

The current US debt currently stands at $11.7 trillion dollars. The new CBO report estimate is that projected spending will create another $9 trillion that must be financed in the next 10 years. If that requires the government to borrow the money and add to the current staggering debt, it is estimated that just the interest on that debt would be more than $500,000,000,000 with interest payments to China alone approaching $1 billion a week. Let me remind readers that the worth of the entire countries production is only around $14.7 trillion. That is everything the nation produces. In 1975 the entire national budget was only $279 billion. The nation had budget surpluses until 1983. With the massive growth of federal spending in this decade, Congress has managed to dispense totally with any of the rules of financial responsibility. Congress and the Administration have gone on an unprecedented spending orgy which has created a situation that threatens economic collapse within the US, and a domino to other countries.

In practical terms, what does all this mean? It means devaluation of the US dollar against most other currencies. It means massive inflation of all imported goods. Several senior financial executives of some of the major international corporations have said that they are currently revising their business models to provide alternative strategies. Rather than converting their foreign currencies to dollars and transferring them to US holdings, money is being maintained in foreign currencies and left in countries where they are earned. Capital investments are being diverted to other countries where they can earn more and have less risk of devaluation. This means jobs go with it. That in turn will further undermine the country’s ability to recover or to pay down the deficits, and that could then become a downward spiral. Most law makers are not financial experts and far too many in Congress have no business training at all. Most have no concept of the problems they are creating or their impacts. They don’t even comprehend the enormity of these numbers, yet they go on naively spending as though the national treasury was their personal bottomless pit of gold. This is coming to end, with or without their help. The numbers simply won’t allow it and the outcomes are certain if the spending continues. It is quite simply unsustainable. The question now is, “What will happen to us”?

We must ask ourselves whether we are going to allow the lunatic fringe of our society to force us into national bankruptcy. There is only one course and it is now or later, but later could be a very bleak scenario. The country always seems to have to be faced with disaster before they react, but in this case it will be too late. It is not too late to prevent a financial collapse, but even now the choices will be difficult and severe. We must stop contributing to the debt, even a little, and start to pay it down. We are already past the point of letting the next Congress and Administration deal with the problem. It is exactly like our financial positions when we allow ourselves to go into debt beyond our ability to pay. This is real and it is now. The future of our country is now at stake and the stakes are enormous. This is about our national security and survival. Our voices must be heard and they had better be heard in the next elections or we will soon be discussing our own personal financial survival.