May 5
Debt-Ridden European Nations May Foreshadow Future For U.S.
I don’t enjoy being the bearer of frightening news, but in this case I feel it’s very important.
As we all know, our federal government is reeling in debt, with our percentage of debt to gross national product getting dangerously closer all the time. That’s a recipe for short and long-term economic disaster, if we don’t move quickly to pay down our debt and improve our credit standing with the world’s financial institutions.
We received a warning of how things might turn out this week, when Greece, a European nation riddled with debt, had its credit rating dropped and desperately sought emergency loans from the German government, and other sources, to avoid financial default.
Spain, another nation with a huge deficit spending problem, also saw its credit rating downgraded, a move that sent shivers through European markets. Spain’s large economy is critical to the European economic landscape, and its ability to manage its debt and pay off its creditors is viewed as crucial to the continent’s economic stability.
If either of those nations default on their national debts, those who have loaned them large amounts of money will be out in the cold. At that point neither nation will have the ability to borrow significant sums from foreign sources, and could require massive financial bailouts by the other European Union countries.
In short, the huge national debts of a few nations is threatening the economic future of the entire European continent.
Here in the United States, our national debt has increased to an astounding $13.2 trillion, and our gross national product is about $15 trillion. That means we owe nearly as much money as our economy generates in one year. If Congress does not take drastic measures to cut spending and get the debt under control, our credit rating will also drop, crippling our ability to borrow money at reasonable interest rates, finance government activities and maintain our current lifestyle.
If the national debts of Spain and Greece are a threat to Europe’s economy, imagine the threat to the global economy if the U.S. were to default on its loans.
Economists say our economy is slowly improving, but recovery could be a short-lived dream if we don’t get our spending and debt under control.
To accomplish that, the Obama administration and Congress must stop spending at a reckless rate, and constantly raising the ceiling on the national debt. The day of reckoning is quickly approaching, and our hopes for a full recovery and increased job creation could be scuttled. This point was made quite eloquently by U.S. Rep. Paul Ryan of Wisconsin, the ranking Republican on the House Budget Committee, who appeared recently on C-SPAN to discuss the dangers of our debt.
As I’ve said many times, my top priority as your next congressman will be to join responsible colleagues like Ryan in attacking deficit spending and the huge national debt.
I want to help Congress go through the difficult process of determining its spending priorities every year, then make the painful but responsible cuts that are necessary to get our financial house in order. The short-term effects of those cuts will be painful, but it will be better than sacrificing our long-term prosperity.
