Deficit commission co-chairs warn of Greece-like debt crisis in US
The US would get in quick financial trouble and military funding could be jeopardized if Congress ignores the recommendations of the deficit commission, its co-chairs say.
The co-chairs of President Obamaâs deficit commission offered a scary forecast of what could happen if Congress ignores their panelâs recommendations and does not act to bring the nationâs deficit and debt under control.
First, financial trouble could come quickly, said former Sen. Alan Simpson, co-chair of the National Commission on Fiscal Responsibility and Reform. âIt wonât be the old slippery slope [stuff] that we read about.â
Speaking at a Monitor-sponsored breakfast for reporters on Friday, Mr. Simpson said, âIt will be very swift and very dramatic like in Greece or Ireland or Portugal or Spain.â He added, âIt wonât take long. It wonât be like a year to prepare â it will be âwoosh,â like that.â
The panelâs other co-chair, Erskine Bowles, President of the University of North Carolina, said that the biggest threat to US national security âis the buildup in this debtâŚ because we wonât have the capital to fund our military.â
If foreign lenders cut back on the buying US government debt, it could also put upward pressure on the interest rates companies have to pay to borrow. Mr. Bowles, who has an extensive business background said, âAs a business guy, if I canât get money to grow my business, I am out of business,â he said.
He noted that current interest on the federal debt is around $200 billion and is projected to grow âto a trillion dollars in just ten years.â In terms of government spending, âpretty soon you have no money left for anything else,â Bowles said.