To the Editor:
The failure of the Congressional Debt Committee to reach an agreement to cut $1.2 trillion in spending over 10 years will have real consequences.
At a minimum, Congress will try to undo much of what it passed and President Obama signed into law this past summer. Those actions will lead to more uncertainty in the markets as Washington deals with our exploding federal debt, the issue Admiral Michael Mullen, former Head of the Joint Chiefs of Staff called, "the greatest threat to our national security."
Understand the magnitude of what the Debt Committee failed to do: It failed to reduce the escalating rate of spending by just 3 percent over 10 years. Even if the Debt Committee had succeeded in trimming $1.2 trillion, the national debt would have continued to climb by $8 trillion.
Unfortunately, the committee was not chartered to reduce the level of real spending, but tasked with simply slowing down the rate of increase and therein is the great danger.
The economic storm clouds are building as a result of our national debt. The failure of the Congress to cut spending and roll back government is unconscionable.
With our current national budget, the U.S. government each day spends $4 billion more than it takes in.
There is a long history of what happens to nations who spend beyond their means. Governments that can't find a way to pay their bills ultimately devalue their currency by simply printing more money. Most Americans know little about Zimbabwe, but as recently as 2008, their paper currency was being issued in amounts as high as $100 trillion. Each $100 trillion note is worth about $5.60 in U.S. exchange.
The marriage of uncontrolled spending and inadequate government revenues always leads to the destruction of a nation's currency.
But Congress continues on with a business as usual approach.
It is not a coincidence that the State Treasurers of Ohio and Nebraska, like me, are all running for the U.S. Senate in 2012.
We live in the world of finance and understand that in economics, those who fail to learn the lessons of history are doomed to repeat them.
It's time for the American people to demand that Washington address the real financial crisis facing our nation, which is our national debt.
It's time to roll back government, flatten taxes and adopt a balanced budget that caps spending.
Indiana State Treasurer