Senator Udall (D – Colorado) Speaks

By John Lumbard.

  Republicans are threatening to shut down the government over $100 billion in spending cuts—remember when that was considered big money?—while Democrats try to turn the event to their political advantage.  Wouldn’t it make more sense to take a stand on principle and a permanent change for the better, and insist on one of the three balanced-budget amendment bills in the Senate? 

They’re Senate Joint Resolutions 3, 4, and 5.  Here’s Senator Mark Udall on S. J. Res. 4:

“On February 1, 2011, I proudly became an original co-sponsor of a bipartisan Balanced Budget Amendment, S.J.Res.4. We need a common-sense policy that will help pay down the nation’s debt and restore fiscal responsibility in Washington. The Balanced Budget Amendment would be one part of that larger policy. The legislation would enact a constitutional amendment directing Congress to balance the federal budget each year. It states that federal spending could not exceed revenue, except in special cases, such as when the nation is in a war declared by Congress. And it could be suspended only if three-fifths of the members of the House and Senate agree.

The United States has balanced its budget only five times in the last 50 years. Meanwhile, we’ve racked up a record debt that threatens our future economic leadership. We need to take action now to turn our fiscal situation around and we need to send a powerful signal to financial markets and businesses that the United States is serious about balancing its budget.”

Without that powerful signal, foreign investors might lose confidence and refuse to buy our bonds.  That’s what happened to Greece, and the result was that the interest rate on Greek government bonds shot up to 11% and stayed there—because that was the rate necessary to coax enough buyers out of the woodwork.

Right now the government’s debt is $14.1 trillion, but $4.5 trillion of that is owed to trust funds like the Social Security trust fund, which take their interest payments in meaningless IOUs.  If the interest on the remaining $9.6 trillion (the “public debt”) were to rise to 11%—as it was in the 1980s—the interest on the debt would be, let’s see . . . . .  9.6 times 11% . . . . . more than a trillion dollars a year.

We’re still following the boom-bust-spend-our-way-out-of-debt solution pioneered by the Japanese.  Their national credit rating was just downgraded again, to AA minus.  Please write to both of your state’s Senators to insist that they support Senate Joint Resolution 4!  Or S. J. Res. 3, or 5 . . . . .

You can get your senators’ e-mail addresses and—better—fax numbers at http://www.contactingthecongress.org/ .  Click on your state on the map, and then click on the name of the senator you’d like to contact.  If the Senate passes one of these bills, the House will follow suit.  And we only need 19 more Democratic Senators!

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