Congressman Bill Owens is declaring war on America’s debt.
His new “War on Debt” act aims to reduce the nation’s debt, much of which is held by foreign countries, by selling bonds similar to the War Bonds that Americans bought to help fund the war effort.
Owens, who represents Oswego County in Congress, explained in a conference call with reporters Wednesday that the bonds would only be sold to American citizens and the money raised by selling the bonds would be used only to pay off debt held by foreign countries, such as China.
“We have a very negative balance of payments with them,” Owens said. “Many economists believe if we were able to take the debt out of their hands, we would see an appreciation of Chinese currency of as much as 40 percent, which would have a dramatic impact on the balance of payments.”
At the same time, Owens’ bill would cap the future growth of debt at 3% of the nation’s gross domestic product. He believes that will force serious federal budget cutting.
He said the bonds would have an attractive, variable rate of interest and the interest from the bonds would be tax-free. Buyers would earn interest from the first year and would begin to get the principle back after the fifth year.
“The risk is very small. You’re buying U.S. Government bonds, backed by the full faith and credit of the United States,” he said.
Owens proposes a minimum bond price of $10,000 and believes that many average citizens would cash out other, less attractive investments to buy into the debt bonds program.
The Congressman from Plattsburgh said he began working on the plan on his own, after a meeting among Democrats in which the need to bring down deficits was discussed. “As I was looking at this and seeing projected deficits of 700 billion a year, it was a rather staggering number. I thought I needed to sit down and think about this, so for about 2 months, I have been working on this legislation which I have largely crafted myself.”
He said he’s reaching out for support from Democrats and Republicans.
Doug Hoffman, the Conservative Party’s candidate to replace Owens this fall, attacked Owens and his plan in a statement e-mailed to newsrooms. In a quote attributed to Hoffman advisor Rob Ryan, the campaign said, “(h)is new legislation is merely a cynical election year attempt to appear fiscally conservative, when in fact, he is merely another tax and spend liberal.”