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Sessions Warns of Coming Debt Crisis

By Brandon Moseley
Alabama Political Reporter 

Senator Jeff Sessions (R) from Alabama addressed the Senate Budget Committee, where he is the ranking member, and Federal Reserve Chairman Ben Bernanke who was testifying before the Committee.  Sen. Sessions warned Chairman Bernanke and the committee that unsustainable growth in government was leading to a potential debt crisis.

Senator Sessions told Chairman Bernanke “While we can’t predict the day a debt crisis will erupt – or what unknown event might set it off – we do know we are on a collision course…Yet Majority Leader Reid has closed the ship’s bridge and locked the wheel. He says the Democrat Senate will decline to offer a budget resolution for the third straight year. Not once has this occurred since the Congressional Budget Act was passed in 1974.”

Senator Sessions continued, “The Congressional Budget Office’s new outlook confirms that our deficit will top $1 trillion for the fourth straight year. And the deficits we face in the next decade, are even more relentless and systemic.“ “In just three years, we have accumulated almost $5 trillion in new gross debt – during which time the total number of Americans working has decreased by 1.2 million. We have even fewer Americans working today than more than 11 years ago.”

“I find it beyond imagining that the President, at this critical time in our nation’s economic life, will not lay out a serious budget plan for our future that will get us off this unsustainable debt path – a path to decline. But he did not even mention in his third State of the Union address the danger of our debt – what his Chairman of the Joint Chiefs, Admiral Mullen – called the greatest threat to our national security. Alice Rivlin, in Kiplingers magazine, was recently very critical of the President’s lack of leadership. Real change will not occur without the leadership of the President and he has not only not led, but has attacked those like the brilliant Congressman Paul Ryan, who has. We must hope the President’s official proposed budget will, at this late date, change our unsustainable debt course.”

Famed investor Jim Rogers (originally from Alabama) shares some of Sen. Sessions concerns. Rogers told Investment Week “Things look better, but whether it is actually real or not is the question. I am worried about the U.S., especially in 2013 and 2014.” “In the U.S., they are going to continue printing money and sending out good news to win votes this year.”

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Unemployment is dropping as the first baby boomers leave the labor force to enter retirement.  Federal revenues and wages however continue to be stagnant while government spending remains at record high levels. Last week the Congressional Budget Office predicted that the federal budget deficit would be $1.1 trillion in 2012.  In 2011, the budget deficit was $1.3 trillion. In 2010 the budget deficit was $1.29 trillion and in 2009 the deficit was a record $1.41 trillion.  The U.S. National Debt is currently $15.3 trillion and climbing.

To see Sessions Press Release in its entirety:

Rogers comments:

Written By

Brandon Moseley is a former reporter at the Alabama Political Reporter.