WASHINGTON -- Now that the worst of the economic crisis is past and recovery is slowly under way, Congress must halt the increase in U.S. debt to avoid damage to long-term growth and destruction of the dollar, Warren Buffett is urging.
The plainspoken Nebraska billionaire weighed in with his view in an Op-Ed piece published in The New York Times on Wednesday, saying that once recovery is solidified, lawmakers need to exercise "extraordinary political will" and slow the printing of money to finance the spike in debt.
That huge spending for financial bailout and economic stimulus was sorely needed to rescue the economy in its greatest peril since the 1930s, Buffett said, but now "unchecked emissions" of dollars "will certainly cause the purchasing power of currency to melt" the way runaway carbon emissions will likely melt icebergs.
With government spending now nearly double what it is taking in, "truly major changes in both taxes and outlays will be required," Buffett wrote. "A revived economy can't come close to bridging that sort of gap."
Buffett, one of the world's wealthiest men, enjoys opining on issues of the day. And as the "Oracle of Omaha" and head of a successful investment firm, his views carry weight in the public arena. He has gained a sharper political profile in recent years and has spoken out, for example, on the obligation of the privileged to help the poor.
Buffett was a top economic adviser to Republican Arnold Schwarzenegger's first campaign for California governor and advised Democrat John Kerry's presidential campaign in 2004.
Last September at the height of the financial turmoil, Buffett's firm, Berkshire Hathway Inc., rushed in with a $5 billion investment in Wall Street powerhouse Goldman Sachs Group Inc., a move viewed as a vote of confidence for a survivor of a crisis that felled two of its investment banking peers.
The economy "is now out of the emergency room and appears to be on a slow path to recovery," Buffett wrote in the Op-Ed. "But enormous dosages of monetary medicine continue to be administered and, before long, we will need to deal with their side effects. For now, most of those effects are invisible and could indeed remain latent for a long time. Still, their threat may be as ominous as that posed by the financial crisis itself."
Because of the deficit, the amount of U.S. debt that is publicly held likely will rise to around 56 percent of Gross Domestic Product this fiscal year ending Oct. 1, from 41 percent last year, Buffett noted. The three ways of financing the rising debt -- borrowing from other countries, borrowing from Americans or printing money -- all carry problems, he said.
"The United States is spewing a potentially damaging substance into our economy -- greenback emissions," Buffett wrote.