“Both parties have equally participated in abandoning the limited role of the federal government,” says Sen. Tom Coburn (R-Okla.). Coburn’s new book, The Debt Bomb: A Bold Plan to Stop Washington from Bankrupting Our Economy (Thomas Nelson), argues that Republicans and Democrats together have brought the U.S. to the brink of fiscal calamity.
First elected to the house in 1994 as part of the Republican Revolution, Coburn is a strong fiscal conservative who doesn’t hesitate to publicly criticize members of his own party (including Revolution leader Newt Gingrich) for compromising their principles out of political expedience. Known in the Senate as “Dr. No” for opposing almost all new spending initiatives, Coburn says the federal budget is rife with “waste, fraud, and duplication.” In 2006, he co-sponsored legislation that created USASpending.gov, which makes publicly accessible a list of all recipients of government funds. In 2010, he was instrumental in getting the Government Accountability Office to begin researching and documenting wasteful government programs.
Coburn is a staunch social conservative as well. A supporter of a constitutional ban on same-sex marriage, he was a co-author of the Partial-Birth Abortion Act of 2003, and he supported a 1996 law requiring that “V-chips” be placed in all television sets to allow parents to block programming deemed unsuitable. In 1997, he criticized NBC for airing the Holocaust film Schindler’s List on the grounds that it included “vile language, full-frontal nudity and irresponsible sexual activity.” NBC characterized Coburn’s views as “frightening.”
reason.com Editor in Chief Nick Gillespie sat down with Coburn in July to discuss wasteful spending, entitlement reform, the need for free market health care, and whether he’s losing faith in the government’s ability to enforce values. Watch a video version of the interview online at Reason TV.
reason: Let’s get right to it: When is the fiscal time bomb going to go off?
Tom Coburn: It’s anywhere from two to five years from now, depending on what happens in Europe and what happens in the world economy. But there will be a point in time where people lose confidence in our ability to repay our debts.
reason: But so far bond rates are low, which would signal that people lending us money are OK with us running trillions and trillions of dollars in debt.
Coburn: Bond interest rates are low and that’s normal when you have a debt de-leveraging. If you read long-term economic history, you’ll see that this is not uncommon.
(Interview continues below video.)
reason: So looking at low interest rates is missing the larger point?
Coburn: It’s missing two important points. One is that we’re the best-looking horse in the glue factory. The second point is that just because we have low interest rates doesn’t mean they’ll always be low. When you’ve printed $3.6 trillion worth of money—right now it’s printed but it’s not in the economy, it’s sitting on bank assets listings and the Federal Reserve asset listings—what happens is when that money starts moving, when the velocity of that money starts moving, you’re going to see 15, 18 percent inflation.
So the debt bomb is two things: short-term is deflationary, long-term is highly inflationary. And that has a real meaning to anybody that’s living in our country. If you’re my age or less, and you have socked away something for your retirement, the purchasing value of that goes away.
reason: Let’s talk a little bit about how we got here. Since about 1950, the federal government on average has pulled in about 18 percent of GDP as revenue. But it’s been spending closer to 20 percent.
Coburn: 21 percent.