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WADE: Obama’s re-election could lead to worldwide depression

We need real change in Washington

- - Monday, October 1, 2012

I invite you to visit USDebtClock.org and survey our government's current liabilities. The figures tell a shocking story. I implore you to return to that website from time to time as we proceed to the election in November -- perhaps the most important presidential election since 1860.

According to James A. Baker, former secretary of state, we're "broke." Sen. Tom Coburn, in his book, "The Debt Bomb," writes that "America is already bankrupt." Adm. Mike Mullen, chairman of the Joint Chiefs of Staff under President Obama, said on June 24, 2010, "Our national debt is our biggest national security threat."

That statement didn't stop Mr. Obama from continuing to run another budget deficit to more than $1 trillion, and increasing our national debt accordingly. As of this writing, the national debt is more than $16 trillion.

There are different scenarios that may result when a nation's debt gets out of control. In Germany, following World War I, the government tried to print currency to relieve its obligations. Hyperinflation resulted, and paper money became so worthless that some even used it to ignite fires. The economic calamity helped pave the way for Adolf Hitler's rise to power. Another possibility is what has happened in Japan, where a 20-year period of low or no growth, combined with periods of deflation, has led to the government's present huge debt.

These examples should give us serious pause. If Mr. Obama is re-elected, I believe our economy will become part of a worldwide depression. Why?

First, let's address the economics. The United States' economy represents about 22 percent of the world's gross domestic product. The European Union represents about 25 percent, and Japan makes up about 8 percent. I realize that not all the European Union countries have debt problems, but many do, and there are other countries outside these three jurisdictions that also have debt problems. About half of the world's countries have severe debt issues.

The world is very interconnected now by trade, travel, transportation and communications, including the Internet. If such a large part of the world can't carry its debt and other obligations, the ripple effect will be severe. Look at the disastrous aftershocks of the Lehman Brothers' failure and Greece's troubles.

It would seem that about half the world is very much at risk. According to Mr. Coburn, sometime in 2013 there will be about $13 trillion in sovereign debt requirements and only $9 trillion in world liquid assets to fund it. That's when interest rates will rise, wreaking havoc on debtor nations' deficits. The people who will be hurt the most by this will be the poor and the middle classes.

Coming into the 2012 election, Mr. Obama has increased our national debt by nearly $5 trillion. He has had opportunity after opportunity to address the unsustainable spending and entitlement problems that are well known, though not necessarily acknowledged, by almost all officials in Washington.

In 2008, then-Sen. Obama campaigned successfully, and he has been campaigning ever since. He neither enjoys nor excels at governing. He lacks adequate staff and Cabinet, and governs almost as a one-man team. This means he hasn't grown in the office, and he repeats the same mistakes, as seen in his second attempt at economic stimulus, the 2011 "jobs" bill.

His reckless spending and failure to address deficits, debt, taxes and entitlements mean his re-election would be a catastrophe for our country and the world, and a missed opportunity for a solution under Gov. Mitt Romney.

Let's hope and pray that Mr. Romney -- with a host of Republicans -- prevails in November. We need a leadership team in Washington that will accept the challenge of getting our nation back on track, not four more years of unaccountable leaders dodging the issues.

John E. Wade II is author of "Ronald Reagan's Wisdom for the Twenty-First Century" (Pelican, 2012) and producer of the television series "A World That Works."