‘As Serious as a Heart Attack’: Economist Warns of Economic Consequences of Spiraling Debt

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A leading economist is warning of the dire economic consequences of a U.S. national debt that is currently increasing by $1 trillion every 100 days.

On Monday, Stephen Moore, a distinguished fellow in Economics at The Heritage Foundation, joined “Washington Watch with Tony Perkins” to discuss the current economic outlook for America as the national debt continues to balloon at an unprecedented rate.

“[W]e’re talking about almost $300,000 of debt for every family, which is a gargantuan amount of money,” he pointed out. “… I call this fiscal child abuse because it’s your children and grandchildren and mine that are really going to pay the cost of this. … I think it’s immoral.”

In response to Family Research Council President Tony Perkins remarking that American voters “keep electing the same people who are spending this amount of money,” Moore pushed for change in the upcoming elections.

“[I]n November … I hope people respond to this [with] a thundering disapproval to Congress and the guy in the White House because we have the most financially reckless president in American history. … I didn’t believe that anybody could be more financially reckless than Barack Obama. But Biden has been worse. … [W]here’s all the money going? He’s already approved roughly $150 billion for student loan bailouts. … Congress never approved that through an authorization of funds. And the Supreme Court has said loud and clear … that the president does not have the authority to do this, and yet he’s gone ahead and done it.”

Moore, who also serves as a senior economist at FreedomWorks, went on to give a grievous assessment of President Joe Biden’s spending habits.

“This is as serious as a heart attack,” he emphasized. “This kind of spending is a result of something called ‘modern monetary theory,’ which is this dingbat idea of some second-rate left-wing economists who told Biden, ‘Oh, we can just spend as much money and borrow as much money as we want, and it won’t have negative consequences.’ Well, look what’s happened already to interest rates. Interest rates keep climbing and climbing. Look what happened to inflation. That inflation didn’t happen by accident. It happened because of the massive trillions of dollars of spending that Biden spent and borrowed.”

As Perkins observed, soaring interest rates will likely cause the Fed to reduce them “because we can’t keep servicing the debt. [W]e’re spending trillions on interest on our debt alone. Something’s going to break here.”

Moore concurred. “[W]hen [Trump] left office, the interest rate was 3%. Now it’s 6.5% for a mortgage. … [M]ore and more young Americans cannot afford the American dream of owning a home, because it used to be under Trump, you had to have about a $65,000 annual income to buy a median value home. Now it’s $105,000 because of the higher cost. And it’s going to get worse if we keep borrowing and spending like this.”

Moore, who formerly served as an economic adviser to former President Donald Trump, noted that the 45th president has discussed downsizing the government in order to rein in spending. “I love that idea. Let’s downsize the federal government. Let’s move stuff out of Washington. There’s a reason that three of the five wealthiest counties in the United States are [near] Washington, D.C., and we don’t produce anything. All we produce is laws and lawyers and regulators and politicians.”

On Monday, news broke that economic forecasters are warning of U.S. dollar “death spiral” due to increasing federal debt load. “[I]f we continue on the course that Biden has put us on, then what’s going to happen very soon is that the fastest and biggest component of our federal government will not be roads or bridges or national defense or health care or our education system, it will just be paying taxes primarily to pay off the interest on the debt, and that is a crisis,” Moore cautioned. “That’s what happens in countries like Mexico and Argentina and Venezuela and Zimbabwe. … I guarantee you there will be a financial crisis sometime in the next five years if we continue to do this.”

Even so, the economist pointed out, Biden has indicated he wants to spend even more. “[I]f you listen to what Biden’s been saying, he thinks that there’s $2 trillion of spending he didn’t get … on top of everything else. He wants to raise tax rates to above 50%.”

Moore concluded by urging Americans who want a reduced national debt to practice restraint in their own personal spending.

“We have over $1 trillion of personal credit card debt,” he underscored. “[T]hat’s not a good way to borrow … because they’ll charge you 20, 25, 30% interest on that. And so you get in the same problem the government gets in ?” you’re working harder and harder just to pay the interest on the debt that you owe. [M]y advice to Americans financially is pay your bills on time. Don’t live beyond your means. Washington thinks it can do that, but you and I and the [American] people … cannot.”

Dan Hart

Dan Hart is senior editor at The Washington Stand.

Photo: Unsplash

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Family Research Council
Founded in 1983, Family Research Council is a nonprofit research and educational organization dedicated to articulating and advancing a family-centered philosophy of public life. In addition to providing policy research and analysis for the legislative, executive, and judicial branches of the federal government, FRC seeks to inform the news media, the academic community, business leaders, and the general public about family issues that affect the nation from a biblical worldview. Website: frc.org 1-800-225-4008 801 G Street, NW, Washington, D.C. 20001