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Failure to cut spending in debt limit deal could trigger Greek-style financial chaos, expert fears

"What we are looking at is a Greek-style debt crisis at some point, meaning decades of lost economic growth," warned Heritage Foundation's Richard Stern.

Published: April 24, 2023 11:20pm

If House Speaker Kevin McCarthy (R-Calif.) can't cut a deal to cut spending in exchange for raising the debt limit, it could trigger a Greece-like financial collapse, potentially even sparking violence and unrest of a kind not seen in modern America, warns a federal budget expert at the conservative Heritage Foundation.

"What we are looking at is a Greek-style debt crisis at some point, meaning decades of lost economic growth," Richard Stern told Just The News this week.

The Greek debt crisis began at the start of the Great Recession and dragged on for years, severely shaking confidence in the nation's economy and resulting in Greece's default on a debt of €1.6 billion to the International Monetary Fund in 2015. 

"We'll have a lack of flourishing and a dimming of the American dream," said Stern, a former staff member with the Republican Study Group, an influential House GOP conservative caucus. "If you look at the 10-year trajectories of the [Congressional Budget Office], what you see is an economy headed for oblivion. And it's not because of anything the American people are doing. It's because of the government. It's taxation, it's regulation. It's taking the things that people produce to hand back to corporations."

Stern warned of the potential for violent protests breaking out if government leaders don't act wisely and quickly. 

"Sadly, I think [violence] is possible," he lamented. "They are hell-bent on destroying the economy and destroying people's livelihoods and pushing the American people and American families into the ground. So, honestly, God knows what that turns into. But I'm sure it's nothing good." 

Stern theorized it could be an intentional Democrat strategy to crash the current economic system to clear the way for a digital dollar and the centralization of financial control in Washington that it would facilitate. 

"It's only been the last 14 or 15 years that the dollar has been kind of intentionally managed in such a poor fashion," he stated. "Eighty-five percent of all of the dollars in circulation have been created in the last 15 years. And it's purely to fund federal deficits, effectively pouring water into the wine of everybody's life savings, diluting it to the point where there's nothing left in terms of purchasing power in an attempt to steal their purchasing power from people who already have savings and give it to the federal government. 

"What they're saying now is that they're seeing the end of the line for that. They're saying, 'Oh, well, we're just going to create this new digital currency.' This is a currency that the government fully controls and not just has all of the data on what your transactions are and where it is, what's being held, but they have the control over it. So they could say, 'Look, there's some company that's no longer woke enough. You simply can't transact currency with them.' Or that their assets are frozen and the government can flip a switch on the computer coding, and it's done. So it gives them that tremendous control. And it gives them a way to bail out the dollar." 

Despite his sense of foreboding, Stern remains hopeful McCarthy can reach a deal with Democrats that would cool inflation and avert currency collapse. 

"You know the analogy of the frog boiling in the pot?" he said. "The frog is boiled. And so the inflation tax that you're seeing, the destruction of the U.S. dollar, of people's savings, the Fed's inability to control both of inflation and interest rates — all of these things are connected. And so for the first time, the burden of this is so large that it is unavoidable. And so, out of that, you're seeing the push of McCarthy's package and some of these other things. That all gives me hope. It all gives me optimism that we can actually get past just poorly managing the disease."

Just The News reached out to The White House for a rebuttal to Stern's comments and to ask if they expect to cut deal with McCarthy, but did not receive a reply. 

You can follow Nick on Twitter @NGivasDC

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