By Capt Joseph R. John, July 18, 2017: Op Ed # 361

Two Naval Academy graduates, believe strongly that the increasing National Debt, that doubled over the last 8 years, is the greatest threat facing the Republic, and it threatens the future of America’s children.  They are proposing the below listed initiative; they are:

 

John A. Knuble, USNA ’62, the former Assistant Secretary & Chief Financial Officer, Department of Housing and Urban Development

William “Bill” Owens, USNA ’62,  Admiral, USN (Ret), the former Vice Chairman, Joint Chiefs of Staff

 

They have proposed an initiative to rein in the out of control spending by an irresponsible Congress, since the revenue stream is far exceeded by the National Debt.  This is not a Republican or Democrat initiative, it is a Patriotic American initiative to move toward a balanced budget, in order to protect future generations of Americans. 

 

If the trends that persisted over the last 8 years continue, it will impair the value of the American dollar and the viability of the US economy.  They are proposing limiting the amount of debt under Article Five of the US Constitution; 27 states are moving in the direction to consider such a proposal.  The goal is to educate American citizens in 7 additional states to support a proposal to limit the amount of National Debt.  

 

Please review the below listed analysis, proposal, and the invitation to visit their Web site.  I strongly support the below listed initiative.

 

Copyright by Capt Joseph R. John.  All Rights Reserved.  The material can only posted on another Web site or distributed on the Internet by giving full credit to the author.  It may not be published, broadcast, or rewritten without the permission from the author.   
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Friends of the Center for National Debt Policy and Balanced Budget Amendment Foundation:   

For the first nine months of fiscal year 2107, the Federal Budget deficit is up over 30% and for the full year up 20%.   The cause?    Spending is projected to grow 6% while revenue, a paltry 2%.  These facts are based on last week’s Congressional Budget Office (CBO) report and they are emerging indicators supporting the 2017- 2027 ten-year forecast.  This data validates the accuracy of the dismal ten-year forecast where interest paid grows as a percent of revenue from 7% to 16%.  

America is running up its credit card debt and the patience of its creditors is what? Lessening?, which is threatening our future and that of our children.   America is entering a period of 'deficit/debt treadmill' where spending outgrows revenue every year under realistic economic growth assumptions and is heading to a continued unsustainable debt growth.   

The Trump Administration's budget forecast on the other hand, projects reduced deficit's leading to a surplus after 10 years rather than the CBO $723 billion deficit.  The difference is the projected rate of economic growth which CBO projects at 1.9% while Trump projects 3.0%.  Nearly all private and public economic estimates are in line with CBO’s growth rate.  A small difference with enormous consequences. The difference between the two, for example, is $3.6 trillion of additional debt, 15% after the ten-year period. The Trump Administration projected a surplus of $16 billion in 2027; CBO a 2027 deficit of $720 billion. An additional $6.8 trillion would be added to the debt over the next 10 years, according to CBO -- nearly $4 trillion more than the administration claimed. CBO’s estimate also omits the president’s tax plan, which costs at least an additional $5.5 trillion if passed as planned.

In the past, these excessively optimistic and untested assumptions like those made by the Trump Administration have never materialized (except tax cuts which have generally been exceeded) so more realistic planning should be based on the CBO projections examined below. 

Unless America learns to plan and live within its means, it’s impossible to forecast the date the resulting unsustainable trends will end.   The implications are clear for our economy, America’s job creation potential, National Security and world leadership as outlined below: 

1. For the next ten years, the ratio of public debt to the economy, Gross Domestic Product (GDP), grows from 77% to 91%.   Credible verified research demonstrates at ratios above 77%, growth slows and at ratios above 90% data is simply not available because credit crises have always intervened to terminate debt growth.  America is no different. (See, “This Time is Different Eight Years of Financial Folly”, Reinhart and Rogoff).

2. Recessions will grow deeper and recoveries will be slower as each recession since the 1950s demonstrates (IBID).  

3. Internationally, the trend of a weakening dollar, off about 10% in 2017, will continue and its role as the primary reserve and trading currency will be reduced.    Analysis of the impact of accelerated deficit and debt growth on the value of the dollar, demonstrates a distinct relationship in which growth in deficits and debt/GDP ratios inevitably impairs the value of the dollar.   

Our advisor close friend and co-signee of this communication, Admiral Bill Owens, second career has made him an international businessman and world traveler with firsthand direct knowledge about the many countries, particularly in Asia, Southeast Arisa and South America, who are rejecting the use of the dollar and asking to do business in Chinese Yuan.  The International Monetary Fund’s (IMF) policies reflect a projected reduced role for the dollar.      

Despite each party when in power asserting debt control the Federal Government is demonstrably incapable of dealing with this debt addiction without outside intervention.  Neither the ?Congress, as proven by history, nor President Trump have proven themselves capable of providing the leadership needed to reverse these trends.  

There is a solution, but immediate action is needed.   The solution is a debt limitation amendment to the Constitution under its Article Five.   Currently, there are 27 states supporting the movement with 34 needed to move forward.   As the movement closes in on the 34-state constitutional target, opposition grows from more uninformed and at times, irrational sources.  The key is education of the general public and targeted educational campaigns focused on target states.  To accomplish this, we need your financial and volunteer support!   

Our goal is to raise at least $1.0 million in 2017 and enlist volunteers willing to support these educational efforts on college campuses and main street America.   Also, to write and publish educational and presentation materials needed to run the required nationwide campaign.   

Please join us by indicating a willingness to volunteer and/or financially support this effort by visiting our web site at www.CFFRA.org and contribute a tax-deductible donation or by mailing a check to our Treasurer Bob Frank at the address below. 

With respect and best wishes,  

John A. Knubel                                          Bill Owens 

Tel:  301 502 1445                                     Tel: 646 265 1021

johnknubel@gmail.com                            bowens@red-bison.com

Mr. Robert Frank                                                                  Frank and Company, LLC  Treasurer, Center for National Debt Policy dba Balanced Budget Amendment Foundation, 1360 Beverly Road, Suite 300 McLean, Virginia 22101-3685 Employer Identification Number or Tax I.D. Number 20-330 2521