Bluefield Daily Telegraph, Bluefield, WV

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WV State News

August 2, 2012

Manchin: ‘Finances are totally out of whack’

Bipartisan conference planned to seek ways of dealing with nation’s debt

Mind-boggling debt is pushing America to the brink of ruin, and if nothing is done soon, look for the old ghost of recession to start haunting again, accompanied by its frightening sidekicks — inflation and steep interest rates.

 So warned Sen. Joe Manchin, D-W.Va., former Sen. Alan Simpson, R-Wyo., and Erskine Bowles, the White House chief of staff under President Bill Clinton, in a telephone news conference Wednesday.

All three plan to be in Charleston a week from Friday for the first-ever bipartisan conference on seeking ways to deal with the nation’s staggering debt, which was nearing the $16 trillion mark as they spoke to West Virginia reporters.

“It isn’t,” Simpson declared, when one newsman spoke of an abundance of “scary rhetoric” in recent months about the debt.

“It’s just math. We don’t disappear. We won’t collapse. We just won’t be No. 1.”

Manchin recalled how appalled he was when the former chairman of the Joint Chiefs of Staff, Admiral Mike Mullen, characterized the debt as the “biggest threat” to America, not any wars on foreign soil, or terrorist groups.

“Our finances are totally out of whack,” Manchin said. “It’s a wreck.”

Bowles called the situation “the most predictable economic crisis in history.”

“There’s no question the fiscal path the nation is on is simply not sustainable,” the former Clinton aide told reporters.

“These deficits are a cancer on this country and they’re going to destroy us from within.”

Is there a predictable tipping point when, if arrived at, puts America under?

“It comes when people who have loaned us money, $16 trillion, will say, ‘You people are dysfunctional. You don’t do anything. You’re sterile. You’re gone. We want a little more money for our money. We want more.’”

And if that occurs, Simpson warned, inflation will kick in and interest rates will begin to soar.

“That will be an interesting point,” the former Wyoming senator said.

All agreed the nation is at a critical juncture and must take major remedial steps by the end of the year.

Every dollar spent on wars, national defense, homeland security, education, infrastructure, and high-value added research is borrowed from foreigners, Bowles said.

“This is a real problem,” Bowles said.

“We have to deal with it. If we don’t, the future of the country is really in danger.”

Manchin said the nation can turn things around but it won’t come without some tough decisions.

“We’re to the point where we have a hard time helping ourselves, let alone the nations in need,” he said.

Despite a popularly held notion, foreign aid isn’t a major component, making up less than 1 percent of the debt, Simpson said.

“That’s a sparrow belching in the midst of a typhoon,” he said.

Nor are waste, fraud, oil subsidies or earmarks heavy contributors to the mass of red ink, Bowles said.

“You have to start with the No. 1 problem — health care,” he said.

“We spend twice as much as any other developed nation in the world.”

When the ill cannot afford treatment, they simply report to emergency rooms at hospitals, and the costs are shifted to taxpayers, he said.

In 1981, about 10 percent of the budget was devoted to health care, and today that expense has climbed to 25 percent, and in a few years, it will consume one-third of the spending, Bowles said.

“Before you know it, we will just be a country that can afford to take care of a couple of geezers like me and Al,” he said.

“The second biggest problem is national defense. We spend more than the next 15 largest countries combined, including China and Russia. And, we have the most inefficient and ineffective globally anti-competitive tax code that man could dream up.”

In simple math, he noted, the fiscal crunch shapes up this way: $1.3 trillion in revenue coming in, $3.6 trillion going out.

“We simply have made promises we can’t keep,” Bowles said.

“Exactly when that’s (breaking point) going to happen? Nobody knows. One thing we do know. If we go over this fiscal cliff at the end of the year, it can throw us back into a recession.”

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