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Financial Collapse or Prosperity: The Choice is Yours! Excerpts from Dr. Byron Schlomach's Testimony in Support of the Compact for a Balanced Budget
September 16, 2014
My name is Byron Schlomach. I am the Director of the Center for Economic Prosperity at the Goldwater Institute in Phoenix, Arizona. After earning my bachelors and doctorate degrees at Texas A&M University, I entered public policy work at the Texas Legislature and then served as Chief Economist at the Texas Public Policy Foundation before coming to the Goldwater Institute. I have worked in public policy for 20 years. Much of the transparency movement originated with my efforts in Texas starting in the late 1990s. I was instrumental in the passage of a public/private partnership law for roads in Arizona, helped lead the way in resistance to establishing ObamaCare exchanges around the country, was instrumental in passage of a law to more easily privatize Arizona state parks, and have studied state budgets in both Arizona and Texas. Many of my recommendations for spending reductions in Arizona during the financial crisis were adopted.
I have been a student of economics for over 30 years and a student of state policy as well as federal policy for nearly as long. The mounting debt of the federal government has long concerned me. Having seen how federal money is spent at the state level as well as the federal, it is not as if the $17 trillion debt was accumulated to win a war that threatened our existence. It was not accumulated in order to build roads, bridges, dams, and pipelines. The big spending has been in programs that have encouraged people to become dependent and irresponsible.
Ultimately, the mounting federal debt must end with the collapse of our nation’s finances as debt has historically done-in Argentina, Germany, Greece, and Spain, just to name a few. The only prop for us now is our currency’s status as the world’s reserve currency, but the still-growing debt and the eventual release of bank reserves will devalue the dollar and eventually cause its rejection as a reserve currency. When that happens, inflation in the U.S. will skyrocket and our economy will be sent reeling. Our only chance is to stop debt accumulation and allow economic growth to catch up with our money printing.
The founding fathers wisely rested ultimate responsibility for the nation in the collective action of state legislatures by allowing them to amend the Constitution. Congress and the President have demonstrated their inability to control the federal fiscal budgetary process. They are marching us to oblivion. State legislators are all that currently stand in their way. You are the cavalry that must ride in to save the day.
Even in the face of long odds, the Compact for a Balanced Budget provides a winning strategy for passage of a constitutional amendment that will impose discipline on the federal government. Some are frozen by fear and risk. But the risk of doing nothing is much greater. We have reached a threshold. Will future generations look back at this one and wonder, if we’d had the courage, would their lives be better? Or will they look back with wonder at our courage and foresight. It is up to you!