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"Our national debt is our biggest national security threat," said Admiral Mike Mullen, Chairman of the Joint Chiefs of Staff, at a "Tribute to the Troops" breakfast sponsored by The Hill on Thursday morning, according to two staffers at the gathering. He also noted a troubling trend -- that veterans from Afghanistan and Iraq are becoming homeless at four times the rate the country witnessed in the wake of Vietnam.
How Austerity Is Tearing Apart the G-20
The summit follows an extraordinary austerity drive by European economies as they attempt to redress their public finances. In the past few weeks, E.U. members have pledged some $240 billion in budget savings to deflate their bloated debts and deficits — as well as patching together a colossal $950 billion safety blanket for the euro. But the cost-cutting crusade has alarmed the U.S., with President Barack Obama warning that slashing too much and trimming too fast could stifle growth, provoking a 1930s-style depression.
The simple argument is: too-high sovereign debt got us into this mess, and there's no way we're going to risk making that worse.
And he takes a real pointed shot at US policy:
Behind the calls for us to pursue a more expansionary fiscal course lie two different approaches to economic policymaking on each side of the Atlantic. While US policymakers like to focus on short-term corrective measures, we take the longer view and are, therefore, more preoccupied with the implications of excessive deficits and the dangers of high inflation.
"Governments should not become addicted to borrowing as a quick fix to stimulate demand," Schaeuble wrote in an op-ed piece printed in the Financial Times and Handelsblatt newspapers.
"Deficit spending cannot become a permanent state of affairs," he stressed.]
Ironically, the euro area's overall fiscal situation looks healthier that that of the U.S. Considering the 16 euro-zone members as a whole, their budget deficit is expected to be about 6.5% of GDP and government debt 85% in 2010, but in the U.S., the deficit is at 10% of GDP while debt is at 116%. (The U.S. debt figure is the sum of federal, state and local government debt, which better corresponds to E.U. statistics.)