"I think you'll see a 15 to 18 percent unemployment rate. I think you will see an 8 to 9 percent decline in GDP. I think you'll see the middle class just destroyed if we don't do this. And the people that it will harm the most will be the poorest of the poor, because we'll print money to try to debase our currency and get out of it and what you will see is hyperinflation."This particular statement will be dissected in a moment, but Coburn also claims he could come up with over $350 billion in wasteful spending "off the top of his head." In fact, he even released a report detailing the findings of wasteful spending in 2010.
This sounds terrible! Hyperinflation?! Unemployment rates that mirror the Great Depression?! This is the end of the United States as we know it!!!
Well, wait a minute. Is the economic condition of the United States as bad as Coburn would have us believe? And, if so, is the economy suffering due to the crazy spending by the federal government?
I won't pretend to be even remotely satisfied with the way the national government's spending habits, but I find Senator Coburn's assessment to be a little strange.
To start, Coburn's report on 2010's wasteful spending includes a list of examples totalling approximately $11.5 billion. There is no doubt that this is a significant amount of money and should be spent appropriately. However, this makes up about 1% of the budget. And did the senator not say he could name over $350 billion in wasteful spending 'off the top of his head?' If that were truly the case, I would not only want to see such a list, I would insist upon it.
In all fairness, the spending discussed in Coburn's report does indeed appear to be wasteful. But the wasteful spending isn't the point. No one really would say they approve of misuse of their tax dollars. What is frustrating is that Coburn appears to be creating data out of thin air.
How can wasteful spending lead to a dramatic increase in unemployment? Where is the connection to a decrease in GDP? And though the government is attempting to guide the country through rough times, I haven't heard of any talk concerning the printing of more money. The answer is: no connection exists.
So why did Coburn decide to pull a 'Chicken Little' on the country? Does he genuinely believe what he is putting out there? I believe he does. He voted 'no' on all three proposals for extensions of tax cuts and appropriations bills.
Despite his gusto and passion for helping the country, Coburn shouldn't be so irresponsible with his statements to the media. Panic, in our economy, is a dangerous enemy. And we shouldn't be in a sense of panic. Citizens should be concerned and looking for ways to balance the budget, but using fear as a motivator won't solve anything.