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Mr. PAUL. Madam President, America will not default on her debt today. In fact, there was never any doubt that America would pay her bills. But mark my words, America will default. America will default, not by not paying its bills, not by not raising the debt ceiling, but we will default in a more insidious way. America will default by increasingly paying our bills with money that is worth less and less each year.
A nation pays for its debt in three ways. We can either tax people, we can borrow the money, or we can simply print the money. They all have repercussions.
We are approaching our borrowing limit as a nation. We now owe China over $1 trillion. We owe Japan nearly $1 trillion. We even owe Mexico. As we reach our borrowing limit, interest rates will rise and the prices in the stores will rise. You are already seeing this in your grocery stores. You are already seeing this in your gas prices. They are not rising de novo, out of nothing. Your prices are rising because the value of your dollar is falling. The value of your dollar is falling because they are printing up money to pay for this exorbitant debt.
In 2008 we went through a banking crisis and we doubled the monetary supply in 4 months. We bought things. The Federal Reserve bought toxic assets. They bought bad car loans and bad home loans. Where once upon a time your dollar was backed by gold, your dollar is now backed by toxic assets--not a very comforting thought.
Many pundits are arguing that the tea party has won this battle. They misunderstand the debate. This battle is not about winners and losers, it is about the future of our country. It is about saving ourselves from ourselves. We are headed toward ruin if we continue on this path of spending money we do not have.
For decades, America has lived beyond her means. A nation that lives beyond her means will eventually live beneath her means. That day is coming. A day of reckoning looms. That day was never August 2. That day is when the dollar teeters and falls from its perch. That day is when prices soar. That day is when unemployment and a declining standard of living foment discontent and unrest in the street.
As Erskine Bowles put it, there has been no more predictable crisis in our history. We have been given all the warning signs. It comes, and this deal will not escape the facts that are looming for us. The President thinks that we need a balanced approach. America thinks we need a balanced budget and that we should not spend money we do not have; that since American families have to balance their budgets, why in the world would we not require our Government to balance its budget? What America needs is a balanced budget in an economy that grows and thrives and creates jobs.
Yes, a malaise hangs in the air. America is a ship without a captain. Instead of the President chastising job creators and preaching class envy, we need a President who will show us leadership. The President needs to accept responsibility for an economy that has worsened under his failed leadership. Unemployment is up, gas prices have doubled, and this President will add more debt than all 43 Presidents combined.
America got a deal on August 2 but not a solution. What America wants is a solution, not a deal. I hope in the next 6 months the President will find it within himself to lead the Nation, the courage to lead and embrace reform, the reform that is necessary to get this great country going again.
I yield the floor.
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