Is it now obvious that the U.S. government plans to inflate its way out of debt?
*Texas Straight Talk, by Congressman Ron Paul, November 29, 2010:
''As of November 7th, the total U.S. public debt outstanding reached
an astonishing $13.7 trillion. This means that although Congress
just raised the debt ceiling to $14.3 trillion back in February, the
new Congress will face another debt ceiling vote almost immediately
next year. Otherwise, the Treasury will not be able to
continue issuing debt to fund government operations.''
''Surely we are facing an emergency debt spiral, as evidenced by the
Federal Reserve's recent commitment to buy another round of Treasury
debt. It's now quite obvious that the U.S. government plans to
inflate its way out of debt, and the world is fleeing our dollar in
response. Just 7 years ago Congress raised the debt ceiling to
$6.4 trillion, which means the federal government had doubled its
indebtedness in less than a decade. Annual deficits for 2011 and
beyond are projected to be at least $1 trillion. By contrast, the
entire federal debt amassed from the founding of our nation until
President Reagan took office in 1981-- a period of roughly 200 years--
was $1 trillion. So it's no exaggeration to state that federal
debt is growing exponentially.
I have two simple proposals when the new Congress convenes in
January. First, refuse to raise the debt ceiling.
Find a way, month by month, for Congress to spend only what the
Treasury raises in revenue. Second, start over from scratch with
the 13 appropriations bills that fund the federal government.
Reject any talk of baseline budgets or discretionary spending. It
is all discretionary, and members of both parties should vote against
any 2012 appropriation bill that is not at least 10% smaller-- in
nominal dollars-- than its 2011 counterpart.
A motivated Congress could begin to slow the tide of debt by taking the
simple step of cutting federal spending by 10% across the board for the
next few years. Let's hope it does not take the complete collapse
of the U.S. dollar to provide this motivation.''
*This information is solely a highlight of the opinion of a third-party publication and is incomplete. Please subscribe to this publication for the full and timely opinion of the author and call a Monex Account Representative for any additional up-to-date information. This is not an offer to buy or sell precious metals. Investors should obtain advice based on their own individual circumstances and understand the risk before making any investment decision.
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