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Raising the Debt Limit

Location: Washington, DC

Mr. Speaker, the Congress is concerned about the debt. The people are concerned about the debt. The markets are concerned about the debt. The world is concerned about the debt and what we're doing here today because we live with a world fiat dollar standard, and so the whole world is engulfed in this very serious problem.

I do not understand, though, that if the debt is the problem, and I agree, the debt is the problem, that for us to come here and raise the debt by $2.4 trillion is the solution. That just baffles me. I think it's a distraction, because when a country gets indebted to the degree that we're indebted, the country always defaults. This is historic, especially if the country is a significant country. On occasion a small country will quit sending the checks and they'll go bankrupt. We're not going to do that, but we will default because the debt is unsustainable.

This year it is said that we have a debt increase of $1.6 trillion, but that's not true. If you count what we borrow from the pension funds, the Social Security and highway funds, it's $2 trillion. But if you include the increase in the entitlement obligation, it's $5 trillion. So this is a huge, huge problem.

But the argument here is how do you default. And it is said that if we don't raise the debt limit, we're going to default and not send out the checks. I don't believe that for a minute. Somehow or another the checks are going to go out.

But if you really wanted to live within the technicalities of law, there's a very simple thing you could do. We owe the Federal Reserve $1.6 trillion. Well, that's not a real debt. They bought those Treasury bills with money out of thin air. We could just write that off or quit paying the interest, tide ourselves over and get down to serious business and cut back and live within our means, and that would be a solution.

But to increase the national debt will only encourage another type of default, and that's what we're going through. We're engaged in the most difficult and a very bad way of defaulting, and that is through the destruction of the currency.

Today we have an inflation rate of 9 percent, and that is defaulting. So if a government can default and print money, and if they can get a 50 percent inflation rate over a period of time, they've cut that debt in half. That is the goal; that is what's happening. And that is very, very serious.

Just in these last 3 years in dealing with this crisis, the dollar has been devalued 50 percent against gold. And gold, of course, is the best measurement of the value of a currency. It's been that way for thousands of years, and it cannot be denied because it's economic law. So we are defaulting.

And when the American people go out and start buying goods and services, like they are now, they are recognizing they cost a lot of money. So right now we are in the early stages of rampant inflation, which means we're going to be hit with higher prices and higher interest rates. That is going to be a tax.

So I see the only solution is to cut spending. Now, the reason we don't cut spending is one side loves entitlements and the other side loves war. And even this token attempt, $100 billion of cuts when we have this huge, huge deficit will accomplish very little.

But there's no mention of cutting military spending. I don't want to cut defense spending. This military spending doesn't defend us; it makes things worse.

Our problem in this country doesn't come only from the Congress; it comes from the people. The people still have a strong appetite for Big Government programs. They're not willing to cut. They think government can take care of us from cradle to grave and that we can be the policeman of the world.

So some day we, as a country, we, as a people, and we, as a Congress, will have to ask, what should the role of government be? The Founders had a pretty strong suggestion. They wrote a Constitution and said the government should be very limited and the government should be protecting our liberties and providing national defense and a sound currency. We don't do any of that. We've embarked on a course that was destined to end badly, and this is where we are today.

So if we don't understand this, this default will not be because we don't send out the checks. We will send out the checks. It will be defaulted on because people will get their money back, or they will get their Social Security checks, and it won't buy anything. That is much, much worse than facing the fact that we not raise the debt limit and work our way out of this.

That is devastating economically, and it's devastating politically, because we just saw a taste of what happens, how the anger is built when you see other countries in Europe now defaulting and can't pay their bills. So this is more significant than ever because we provide the reserve currency of the world.

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