by Mitch Kokai
Senior Political Analyst, John Locke Foundation
Senator Rand Paul (R-KY) in a back forth with Senator Mike Lee (R-UT) forecasted some of the dangers of this massive government spending.
“It is alarming. It is foolish and unwise for us to say, oh, it’s there are no consequences. I think there will be consequences. And the number one that we’re seeing now is inflation,” Paul Stated.
Senator Mike Lee went on to ask about the United States’ position as the world reserve currency, “As the United States is having the world’s reserve currency, the US dollar has given us some flexibility in that area, flexibility that other countries like Greece haven’t had. You think there’s some risk of becoming overly confident in that world reserve currency status, in other words, could be could we be jeopardizing the very thing that we fought so hard to achieve and that so few nations ever achieve?”
Paul responded, “having the world’s currency allows us, you know, many countries trade in dollars. You’ll go into marketplaces all around the world. And what they’re actually exchanging is dollars. Paul then went on to state “Some have described that as being able to export our inflation. People have also said, well, the dollar is it perfect, it’s a fiat currency, it’s being inflated, but everybody else is so bad that we’re sort of the cleanest shirt and a closet full of dirty shirts. So, yes, I think being the reserve currency has allowed us to last longer. But there are immutable rules of economics that eventually catch up to a country. And I think we approach those.”
Paul then forecasted what could happen if we keep going down this path, “I don’t think anybody can predict exactly when we get there. But I think we are approaching a time and it may not be a gradual unraveling. You know, if you look back at the history of our marketplace, we’ve had these black swan events.”