So, on one hand we have Sen. Tom "I block 9/11 first responders from getting health care" Coburn predicting doom unless spending is cut immediately.
Coburn, who said throughout the interview he was not trying to "scare" Americans with his rhetoric on the deficit, was then asked to give his worst-case scenario outlook for the American economy.
"I think you'll see 15 to 18 percent unemployment rate. I think you'll see a 8 to 9 percent decline in GDP. I think you'll see the middle class destroyed," Coburn said.
"The people it will harm the most will be the poorest of the poor," adding that he believed hyper-inflation could contribute to the degradation of the American way of life.
On the other hand, we've got actual inflation numbers showing Coburn wouldn't know what he was talking about if he had a team of rocket scientists explaining things to him, as Steve Benen explains.
Apparently, as Coburn sees it, spending will lead to inflation, which will lead to "apocalyptic pain," especially for lower-income Americans. The solution, then, is to take capital out of the economy by slashing public spending, much of which benefits lower-income Americans, deliberately slowing already-weak economic growth.
I just don't know what planet Coburn is living on. The right-wing Oklahoman, best known for his recent fight against health benefits for 9/11 first responders, may not realize it, but the inflationary threat -- the one that he thinks would lead to 18% unemployment at a 9% drop in GDP -- doesn't exist. When the most recent economic figures were released, showing GDP growth at a severely underwhelming 2.6%, there was scarcely any inflation at all. Indeed, as of a month ago, core inflation was at its lowest levels since officials starting keeping track over a half-century ago.
On the gripping hand, we are seeing major speculative action in commodities right now, particularly basic foodstuffs like sugar and other commodities like oil (not to mention gold and silver). So we are seeing price rises, but they are being caused by market speculation, not demand. Remember $140+ a barrel oil in 2007?
Same thing appears to be happening again. There's no fundamental reason for these massive shifts in price. It's just another Big Casino game being played with taxpayer money and backed by moral hazard.
And Coburn's very quick to blame the taxpayer for causing the problem. Either way, we're the ones who will have to pay.