Posted on 05/08/2020 5:44:03 AM PDT by RandFan
Rep. Thomas Massie, R-Ky., is warning that federal coronavirus stimulus spending could drive the national debt to $40 trillion by the end of the pandemic.
“The governors are talking about opening the economy back up, but they're talking about doing it under limited circumstances, and they're all warning they will shut it right back down if they see an increase in the numbers of COVID infections. And there's no reason to believe the numbers won't increase when they open it back up,” Massie said during an interview with Just the News.
“We've spent $7 trillion — spent or loaned. I think you can expect to see us spend or loan at least another $7 trillion so $14 trillion, round it up to $20 trillion. We’ll probably, if you count the extra stuff that's on the balance sheet at the Fed, we’ll probably double the $20 trillion debt before this is over with,” he added.
The debt held by the public is currently close to $20 trillion and the total outstanding national debt is more than $25 trillion.
Massie, a member of the House Committee on Oversight and Government Reform, was asked how much he thinks the national debt will rise by the beginning of 2021.
“There's no end in sight until we tie some of this money to the governors opening their states back up for business — that’s the only way this thing comes back to normal,” Massie said.
“The problem with that is it turns out the stimulus package or the bailout package, whatever you want to call it, is about 80 percent popular right now with the American people — because it's popular to do these bailouts, congressmen are going to keep meeting and doing the bailouts,” he added.
Massie said the only thing that's going to “snap people back to reality” is when there are empty shelves at grocery stores or Walmarts because people have been "getting their money" from government programs but haven't been going to work.
“This is not sound policy, and it will catch up with us. Actually the worse situation would be if 5 years from now we’re all paying 30 percent of our income in interest to somebody but I don’t know who we’d be paying it to. Who’s going to loan it to us at some point? I think the interest rates are going to start going up,” he said.
Massie explained that the potential for rising interest rates was of great concern among GOP lawmakers during their recent discussion with Federal Reserve Chairman Jerome Powell.
“Behind closed doors, they seem like raging fiscal conservatives. It's only when they get to the floor and vote that they lose their minds and their principles. But behind the scenes on this conference call, they were all talking about the problems of inflation and the problem of when you borrow too much money without a sound plan for paying it back in a timely fashion that interest rates inevitably have to go up,” Massie said.
“You're going to see the rate, not just the debt go up, but the rate of interest that we have to pay on the debt is going to go up too and when this is all over, we'll probably be paying at least as much interest as — $600 billion a year — as we spend on the military,” he added.
The Democratic-led House and Republican-led Senate passed the $2.2 trillion CARES Act in late March as the third-phase coronavirus economic relief.
Senate Democratic leader Chuck Schumer wants a "Rooseveltian" size fourth coronavirus package focused on state and local assistance. Other items discussed as part of the Democrats' plan include rent assistance, universal broadband, infrastructure upgrades and more direct stimulus payments.
Massie said he plans to vote against additional coronavirus stimulus spending.
"This is going to boomerang on us, and it's going to boomerang hard when all the printing and the borrowing and the loaning catches up to us," he said. "And the burden is going to be on the middle class, the productive members of society who go out to work every day, pay the bulk of the taxes and that's who it's going to come down on."
Don’t cry for me Argentina...
Why does Congress “warn” us _after_ they inflict their damage?
Well, if the “rich” would just pay their “fair share”, we could pay for everything with no debt!!!!!
I remember the good old days when a $1T debt was shocking. But back then, the debt/GDP ratio was only about 33%. Now it’s, what, nearly 200%?
One of the tools in the marxist muslim alliance’s toolbox is bankruptcy.
That was one of Obama’s goals.
Now we face another attack in a different form.
Where’s the $7 trillion figure coming from?
We have the copy machines. They are top of the line and can certainly handle the job. The question, however, is:
Do we have enough trees?
CARES ACT, the one before that and the loans from the Federal Reserve ($4 trillion).
That’s how he gets the figure
If the Democrats win in November, it will exceed $40 trillion as they bail out the Democratic cities and states. Serious inflation is on the horizon as the economy begins to open. The price of gold will parallel reliable polls. If Biden really appears to be winning , gold prices will continue to rise. If unimaginable disaster occurs and the creepy, demented corrupt Biden is actually elected, the price of gold will exceed $2,000/ounce by the inauguration.
> we’ll probably be paying at least as much interest as — $600 billion a year — as we spend on the military <
That’s the key point right there. The Europeans addressed that problem by simply downsizing their militaries. But we cannot afford to do the same.
Side comment #1: Thank goodness Trump is president now.
Side comment #2: Red China can go to hell.
Maybe we should get back to an economy based more on production and less on the parasitic “service industry.”
I have a feeling that voters will keep a divided government either Biden wins and the House flips or Trump wins and the House stays Dem.
I don’t know which one will happen but it means the states might not get their bailout.
You betcha. Anybody and everybody will get bailed out. Mismanaged states and cities, newspapers, symphony orchestras, pension funds, etc., etc.
Brother, can you spare a dime trillion dollars?
Scary suff IMO
There is a limit to this madness and it seems the Dems are happy to push it.
Communism is coming. The current economy produces $21 trillion per year. A third of that is now outlawed, and we reasonably can expect half of the total economy to vanish in the depression as other sectors contract. For example, construction workers legally may build a theater, but with operation of a theater outlawed, no one can afford to construct one. So they too lose their jobs. And so too do the manufacturers who otherwise made equipment with which to construct such theater. We’ll presume that our president does an optimal job of managing the economy under the circumstances, and place future gross domestic product at $10 trillion.
After current bailouts, federal spending jumped from $4.4 trillion last year to more than $7 trillion. Congress never reduces spending, so expect this to continue or even to increase. Total gross domestic product includes government spending. State and local spending constitute roughly $4 trillion of the economy today. We can expect some reduction in this spending if only because state constitutions require balanced budgets, but many entities will raise taxes, perhaps doubling the current rates. Lawmakers especially will raise property taxes because they do not depend on the capacity of the property owners to pay. As a result, vast hordes of homeless persons will lack property entirely, for whatsoever they acquire, the government will tax away. The property taxes can drive the effective total tax rate above 100% of income, thus depriving the multitudes of any assets. In Illinois particularly, government spending on pensions cannot be reduced as a matter of constitutional law, so taxes must increase, swallowing the entire private economy and private invested wealth.
No one will lend to the feds at some juncture, especially with a collapsing birthrate and economy and with no apparently payback prospects from a collapsed or outlawed private economy. So, Congress must raise taxes to sustain spending. Expect federal tax rates above 80% with progressively fewer exemptions, mostly trained ever more narrowly at a few oligarchic sponsors in exchange for gigantic bribes.
Nevertheless, that calculation leaves little room for any private economy, and most of that economy will operate underground under increasingly severe repression. Expect government to expropriate private assets to meet its expenses.
Welcome to communism, where the private sector is effectively outlawed or taxed unto oblivion.
Cloward-Piven baby!
-Fiat currency
-Debt held by Fed Reserve, a private bank
-Fed recently placed under Dept of Treasury (where it belongs)
-Chairman of Fed is now Donald Trump
-Expect debt forgiveness when we are place under gold backed currency 2021
A few thoughts:
1) When the USSR went broke, did anyone want to put the big centralized power back together? study that recent history as well as the demise of other great powers.
2) Becoming? Our economy IS the government. read the Vampire Economy and tell me that isn’t what we have today.
https://mises.org/library/vampire-economy
3) The 2nd amendment may still be our saving grace. When the guns are gone, I will be less hopeful.
4) There is no doubt there are tough times coming. How the story ends is not determined at this point.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.