By Troy Laack
Republican U.S. Sen. Ron Johnson of Oshkosh summarizes the root cause of the nation’s problems in a few words – the size, the scope and the cost of government.
“Our budgetary process is broken,” Johnson said Friday in an interview at the Freeman. “Our political process is broken. Washington is broken.
“We really need to cut spending next year,” Johnson said. “The way the federal government budgets is baseline budgeting. Whatever they spent on a program last year, you’re going to spend that this year and then some.”
Cutting spending is important to lowering the baseline, Johnson said. If the government can cut $100 billion out of a $3.7 trillion budget, over 10 years it will save more than $1 trillion.
“Right now, we’ve hit the debt ceiling,” Johnson said. “Our current national debt is $14.3 trillion.”
The size of the economy is slightly bigger than that, he said. If the U.S. total gross debt goes above 90 percent of the Gross Domestic Product, America could face serious economic consequences, he said.
The U.S. dollar is beginning to lose its position as the world reserve currency, Johnson said. Some Chinese exports are already being paid for in renminbi, the official currency of the People’s Republic of China, rather than U.S. dollars.
“There was a meeting, I think of Brazil, Russia, India and China, the BRIC countries, where they basically discussed ‘How do we replace the U.S. dollar as the reserve currency,'” Johnson said. “That’s a real concern.
“The only reason we’re able to print money the way we are and get away with it is because the U.S. dollar is the world reserve currency,” he said. “If we lose that, we’re going to be subject to the discipline of the marketplace just like Greece. Part of the reason Greece has a debt crisis is they can’t just print more money because they’re not the world’s reserve currency where the U.S. is.”
Johnson was critical of President Barack Obama’s budget proposal last month.
“It was such an unserious effort, it failed 0-97,” Johnson said. “It didn’t even get one vote from a democrat.
“That doesn’t create a whole lot of confidence,” he added. “I think what we need to do is cut, cap and balance.”
The federal government needs a credible plan to limit spending and reduce the debt, Johnson said.
“What are we doing right now? We’re just printing money,” he said. “The U.S. Treasury issues debt and the Fed buys it. That’s called printing money.”
Printing more money causes inflation, which Americans are already seeing in the cost of gasoline, food and commodities, he said.
“In America, not a whole lot gets done without presidential leadership and we don’t see any leadership out of this president,” Johnson said. “It seems like the only serious effort he’s putting in is scaring the markets, scaring the American people.”
Obama claims that if Congress doesn’t raise the debt ceiling, it’ll be catastrophic Johnson said.
“It doesn’t have to be catastrophic if we plan for it,” Johnson said. “We’d have to live within our means for a while until we sort things out.”
People who are still out of work and may have lost hope should look at what U.S. troops went through in Iraq and Afghanistan, he said.
“We have got to try and shed ourselves of this culture of entitlement and dependency Johnson said. “This is Waukesha County. I think the political attitude here is one that understands what made America great. Have faith in those values. Reinstitute those values. Make sure those values don’t die out.
“I think there’s plenty of hope,” he added. “If we have faith in what made America great, I don’t have any doubts at all but if we continue to go down this path; if we continue to grow the size of government, well, that’s a problem.”