U.S. financial course is morally bankrupt

In light of our leaders in Washington, D.C., passing the more-than2,000-page, $1.3 trillion omnibus spending bill, it is necessary to remind ourselves exactly why the mounting national debt is the single greatest threat to the economic future of the United States. As I write, the national debt is approximately $21 trillion and growing. That is well over our nation’s total GDP and amounts to about $170,000 per taxpayer.

What are the consequences? As seen in foreign countries, such as Japan, when national debt reaches a certain level — in Japan it is about 200 percent of its gross domestic product — investors begin to lose confidence in the ability of the government to repay its debt, and they sell off their bonds. The government is then forced to sell more bonds in order to pay older ones. However, the demand for bonds will be depleted, hence no more can be sold, and the government defaults on its debt.

In the case of the United States, it would be impossible for other nations to bail us out, simply because we are too large. This leaves two destructive options. The government can either defraud investors or print more money to pay debt. The former robs millions of Americans of their savings, while the latter robs every American of their savings with inflation. Said inflation would be greater than any time in our nation’s history, dwarfing that of the 1970s, which peaked at 76 percent. The dollar would become worthless and the world financial system would go down with it. The economic condition of our country would be much worse than that of the Great Depression.

Some economists argue that the United States can take new debt indefinitely. This is untrue. There is a limited amount of capital that can be allocated to the purchasing of bonds, and that will always be true unless the economy grows at a significantly faster rate than the national debt. As of now, that is not so.

Which leads us to the simple solution — cut spending. Alas, our “fiscally conservative” congressional Republicans are doing the opposite. Balancing the budget would cause some shortterm pain. Anyone collecting money from the government in any way would expect to receive less. However, continuing on our current course is morally bankrupt and perhaps the worst crime we as a country could perpetrate against future generations.

Andy Ortiz is a native of Santa Fe and a student at St. John’s College.