Ron Paul says default on debt unavoidable

Rep. Ron Paul (R-Texas) on Tuesday predicted that the U.S. would default on its debt.

When a country is indebted to the degree that were indebted, the country always defaults, the 2012 GOP presidential candidate said on the House floor. We will default because the debt is unsustainable.

Paul predicted that the U.S. government would dodge the best solution, which is to impose real spending cuts.

The reason we dont cut spending is, one side loves entitlements and one side loves war, he said.

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But he warned against the temptation of simply continuing to send out government checks backed with more borrowed money. He said choosing this course would mean default would come in the form of significant inflation and a further erosion of the dollar.

If we dont understand this, this default will not be because we dont send out the checks, Paul said. We will send out the checks. It will be defaulted on because people will get their money back, or they will get their Social Security checks, and it wont buy anything.

He warned this is a much, much worse solution.

Paul was one of several Republicans who spoke Tuesday morning on the House floor in anticipation of the GOPCut, Cap and Balance
bill. Rep. Wally Herger (R-Calif.) was one who spoke in favor of the bill, and said higher spending under the Obama administration was a proven failure.

The tragic reality is that the presidents big spending policies only made things worse, Herger said. Now, with the national debt at crisis levels, he is standing in the way of common sense solutions, offering only lectures, not leadership.

As a matter of conscience, this Congress cannot support allowing President Obama to continue to steer Americas debt past a point of no return, he added.

Rep. Virginia Foxx (R-N.C.) said Democrats have no plan for handling the debt crisis, citing the Senates rejection earlier this year of the Obama administrations proposed 2012 budget.

There is no leadership on the part of the Democrats, she said.

Rep. Mike Quigley (Ill.) was one of the few Democrats who spoke on the debt ceiling Tuesday morning. He argued that Republicans were using the myth of former President Reagan to justify efforts to tie the debt-ceiling increase to spending cuts.

Quigley said that if Reagan could see the current debate, hed see his most dedicated followers using his name as justification for saying no to honoring our debts. Hed see his legacy used to play chicken with the worlds greatest economic engine.