Deficit commission co-chairs warn of Greece-like debt crisis in US

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Deficit commission co-chairs warn of Greece-like debt crisis in US

The US would get in quick financial trouble and military funding could be jeopardized if Congress ignores the recommendations of the deficit commission, its co-chairs say.

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Michael Bonfigli/Special to 海角大神

Erskine Bowles and Alan Simpson, co-chairmen of President Barack Obama's fiscal commission, predicted the crisis the nation would face if Congress doesn't respond to their plan to reduce the country's budget deficit.

By Dave Cook staff writer

Nov. 19, 2010, 2:51 p.m. ET | Washington

The co-chairs of President Obama鈥檚 deficit commission offered a scary forecast of what could happen if Congress ignores their panel鈥檚 recommendations and does not act to bring the nation鈥檚 deficit and debt under control.

First, financial trouble could come quickly, said former Sen. Alan Simpson, co-chair of the National Commission on Fiscal Responsibility and Reform. 鈥淚t won鈥檛 be the old slippery slope [stuff] that we read about.鈥�

Speaking at a Monitor-sponsored breakfast for reporters on Friday, Mr. Simpson said, 鈥淚t will be very swift and very dramatic like in Greece or Ireland or Portugal or Spain.鈥� He added, 鈥淚t won鈥檛 take long. It won鈥檛 be like a year to prepare 鈥� it will be 鈥榳oosh,鈥� like that.鈥�

The panel鈥檚 other co-chair, Erskine Bowles, President of the University of North Carolina, said that the biggest threat to US national security 鈥渋s the buildup in this debt鈥� because we won鈥檛 have the capital to fund our military.鈥�

If foreign lenders cut back on the buying US government debt, it could also put upward pressure on the interest rates companies have to pay to borrow. Mr. Bowles, who has an extensive business background said, 鈥淎s a business guy, if I can鈥檛 get money to grow my business, I am out of business,鈥� he said.

He noted that current interest on the federal debt is around $200 billion and is projected to grow 鈥渢o a trillion dollars in just ten years.鈥� In terms of government spending, 鈥減retty soon you have no money left for anything else,鈥� Bowles said.