Let me first say that I feel that we should definitely be extending unemployment insurance and health care benefits to those who need it most. At its very core, to make sure that those people who are unemployed can still pay their bills, put food on the table, keep clothes on their back, is something that we all should be able to agree on. In the richest country of the world, to have people going hungry is a travesty.
Let me also say that Senator Bunning is a hypocrite. He has switched positions on important issues like the "pay as you go" legislation...he once was for it, but as soon as the president was for it he was against it. Also, as the Bush administration was rapidly increasing the debt with unpaid tax cuts, unpaid wars, and unpaid Medicare expansions he was in the front row of the cheering section. For him to now posture as if he is a fiscal hawk is hypocritical.
Lastly, for Bunning to wait until the last moment to stand up and obstruct the legislation from being passed is disingenuous at the least...purely obstructionist at the most. I try not to judge somebody's heart but if I had to place a bet on whether he was sincere about his position in not expanding the national debt vs. his desire to block any successful piece of legislation from passing under the Obama administration I would probably bet on the latter even though there will never be a way to prove it.
However, no matter how I feel about the motivation for his position, his position that as a country we must start paying for things as we go in order to not place debt on the shoulders of our future generations is correct!
In a phenomenal year we generate approximately $2.5 trillion in tax receipts as a country. In a few years our national debt should reach as high as $15 trillion. This means that if we spent ONE HUNDRED PERCENT of all tax proceeds on paying down the debt it would take us 6 years to pay it all. Here are three reasons this is highly unlikely to happen not only in the next six years but in my lifetime:
1. Our deficits are scheduled to continue to increase over the next few years. We are not paying down our debt, we are adding to it at a record pace. I must admit that much of this spending was necessary to avoid a depression; however, it is time that we start looking aggressively for places to save and fight the voices of the special interest organizations.
2. Interest rates are at record lows and they should soon start rising. Approximately 40% of our debt is held in the short term treasuries which essentially make our debt the same as variable debt. Interest rates have nowhere to go but up which will make it much more expensive to pay off the interest to this debt.
3. Those on the left are too scared to cut spending and those are the right are too scared to not cut taxes...so both sides will continue be either spend happy or revenue deficient.
Let me give you very real scenario of what can happen. Almost half of our national debt is owned by foreign investors because we are still viewed as a safe haven to foreign entities. They invest in the USA to the tune of almost $2 billion dollars per day. Let's say they see our national debt continues to rise and they become a little more skeptical about our ability to pay this debt back. They don't stop investing completely but perhaps they just invest half of what they previously invested or $1 billion per day...still a substantial amount but not as risky. What will this do?
This will automatically weaken the dollar because of the decrease in foreign investment. The weakening dollar will cause inflation, and now you have a spiral of problems that occur including inflation, increased interest rates (which will have to occur because they will have to try to make investments more attractive to foreign investors), steadily high unemployment, and a sluggish economy still remains. An economy that looked very safe before will now not look as attractive...heaven forbid this because we really are at the whim of foreigners. If foreigners decide to pull back, the "ponzi" scheme called the national debt that relies on new foreign investment to pay down interest on existing foreign debt, will begin to unravel. A few failed treasury auctions because the Fed doesn't have enough to spend to cover the lack of interest in our debt (the Fed has already had to cover at treasury auctions because of lack of interest) and the government debt house of cards comes tumbling down.
This scenario is a very real scenario and can easily happen within a few years unless we start to get serious about fiscal responsibility! I don't care that Bunning is lying through his teeth, being hypocritical, or trying to obstruct the President...what he is saying is correct. I don't like being in so much debt to foreigners that one shift in their mentality and we are screwed...we need to start paying as we go. If we can take funding from the stimulus package that hasn't been allocated and put that towards the extension of benefits without adding to the national debt then we are taking a step in the right direction.
I will repeat this again, because I don't want to seem as if I am insensitive to the plight of those who are unemployed whom I am in the streets fighting for every week. I want to see them get an extension of benefits! However, it is beyond time that we start to make sure that we start to take an earnest and honest account of each dollar that we spend as a country. It is just as important to make sure that we provide funding for those who are struggling in the short term, as it is to make sure that our economy can remain stable in the long term. This is not an either or choice because there is a responsible way to do both. Is it too much to ask that we find the fiscally responsible means to solve our problems and ask our government to execute?!