Everybody in the Nevada delegation voted in favor of the deal, except Rep. Mark Amodei. He made a strong statement about just where the country is headed:
“I respectfully decline to support a measure that raises $41 in revenue for every dollar of spending cuts (Congressional Budget Office). This is not a balanced approach. The status quo on the federal budget deficit and federal debt is not acceptable; especially at a time when Nevadans continue to struggle with the uncertainties of a persistent recession, the implementation of ObamaCare, and the administration’s newly expressed desire to increase taxes again this year.
“Adding to the uncertainty misery index for employers and the middle class, is the appearance there is no end in sight to the anti-business regulatory onslaught of health, labor, environmental, and land use regulations pouring out of this administration.
“I will not tell the Nevadans I represent that this bill is anything resembling a solution to the fiscal and economic sickness that threatens all of us. In seven weeks, it will be Groundhog Day all over again when the debt ceiling debate begins and we will have ignored the opportunity to start to address the unsustainable spending and crushing debt that continue to drag down the private sector and the people employed therein.
“I will continue to study any measures in the time allotted and am hopeful that a meaningful and responsible path can be identified and fought for to break the federal spending cycle of deferring fiscal reality to future generations or until a catastrophic financial meltdown requires long overdue fiscal accountability from this president and congress.”
Catastrophic financial meltdown. That is what is coming. The nation will either default on its debt burden or print money to cover it — meaning run away inflation that will sap lifetime savings.
This is what Richard W. Rahn, a senior fellow at the Cato Institute and chairman of the Institute for Global Economic Growth, foresees. Writing at The Washington Times, Rahn says inflation can be held in check only so long.
So far, he says the federal government has been papering over its fiscal irresponsibility through regulatory and central bank actions.
“The recent gains in productivity growth have been taxed away by government. The increases in taxes are all non-legislated taxes, largely invisible to most people. First, there is the inflation tax imposed by the Federal Reserve, which currently taxes away about 2 percent of the purchasing power of the individual’s money each year. There is nothing new in this tax; the Fed has been in the business of creating inflation since it was formed in 1914.
“What is new is the big tax on savings, again imposed by the Fed. By artificially holding down interest rates to lower-than-expected real market rates, the Fed is, in effect, expropriating interest income (an implicit tax) that savers normally would be expected to enjoy. This interest manipulation enables the government to fund its debt at less than what would be real market rates at the expense of savers, making the deficit appear much smaller than it really is.”
Can’t get more than 1 percent interest on your savings? Blame Washington.
Rahn’s conclusion is stark and foreboding. The deficit spending is simply too much to avoid a great inflation sometime in the future:
“The bleak outlook is that most Americans can expect a continued decline in their real, after-tax incomes. History shows that at some time, the monetary bubble will burst. The longer the Fed continues to mask what it is really doing, the bigger the bust will be — only the exact day of reckoning is uncertain.”