Dems Can’t Wait to Spend, But Can Wait to Balance the Budget

November 9, 2011

Democrats Say “Now is Not the Time” to Balance the Budget Even Though They “Can’t Wait” To Spend More Money

The enormous U.S. national debt continues to get bigger, with recent reports stating that the national debt will cross the $15 trillion mark “any day now.”
Despite the growing evidence that the nation’s fiscal crisis is a drag on its economic growth, Democrat Whip Steny Hoyer is saying that “now is not the time” for a balanced budget amendment that would make Washington politicians stop spending money we don’t have.
This blanket opposition to balancing the national budget just like families do every month is especially noteworthy given that Democrats have been saying “we can’t wait” for even more stimulus spending, despite the failure of their first $800 billion stimulus.

BACKGROUND

The enormous U.S. national debt continues to get bigger, with recent reports stating that the national debt will cross the $15 trillion mark “any day now”:

“U.S. NATIONAL DEBT—ANY DAY NOW—WILL SOAR ABOVE THE $15 TRILLION MARK.” (Matthew Jaffe, “U.S. Approaches $15 Trillion Debt Limit,” ABC News, 11/4/2011)

CURRENT DEBT LEVEL: $14.972 TRILLION AND COUNTING: (“The Debt to the Penny and Who Holds It,” TreasuryDirect.Gov, Accessed 11/4/2011)

Despite the growing evidence that the nation’s fiscal crisis is a drag on its economic growth, Democrat Whip Steny Hoyer is saying that “now is not the time” for a balanced budget amendment that would make Washington politicians stop spending money we don’t have:

DEMOCRAT WHIP STENY HOYER: “NOW IS NOT THE TIME” FOR A BALANCED BUDGET AMENDMENT: “House Minority Whip Steny Hoyer, D-Md., said that although he has supported a constitutional amendment to require a balanced budget in 1995, now is not the time.” (Gregory Korte, “House Dems Will Block Balanced Budget Amendment,” USA Today, 11/5/2011)

“NATIONAL DEBT NEARS SIZE OF U.S. ECONOMY”; TRANSLATION: GOV. ABOUT TO “OWE MORE THAN [WE] PRODUCE IN A YEAR”: “A debt-to-GDP ratio of 98% is bad enough. It puts the U.S. closer to rarified territory — countries that owe more than they produce in a year.” (Richard Wolf, “National Debt Nears Size of U.S. Economy,” USA Today, 10/29/2011)

MAJOR ECONOMIC STUDY LINKED GOVERNMENT DEBT TO SLOWER ECONOMIC GROWTH: “The sharp run-up in public sector debt will likely prove one of the most enduring legacies of the 2007-2009 financial crises in the United States and elsewhere… Our main finding is that across both advanced countries and emerging markets, high debt/GDP levels (90 percent and above) are associated with notably lower growth outcomes… Seldom do countries simply ‘grow’ their way out of deep debt.” (Carmen M. Reinhart and Kenneth S. Rogoff, “Growth in a Time of Debt,” American Economic Review Papers and Proceedings, 12/31/2009)

GOLDMAN SACHS RESEARCH: “A DEFICIT-FINANCED BOOST WILL EVENTUALLY LEAD TO A DRAG”: “The eventual effect of sustained fiscal imbalance is slower growth and greater risk of a fiscal crisis. Our estimates suggest that a 10-point increase in the debt/GDP ratio lowers growth four years later by 0.2 percentage point, and increases the probability of a debt crisis by 2.5% in the aftermath of a financial crisis like the recent one. …

“Ultimately, what goes up must come down. In the case of the federal budget, this means that a deficit-financed boost to growth will eventually lead to a drag. While policymakers can try to smooth the transition by phasing in cuts and incorporating multi-year fiscal commitments, achieving a sustainable fiscal policy will inevitably be a painful but necessary process.” (Jan Hatzius and Alec Phillips, “Fiscal Restraint: A Question of When, Not If,” Goldman Sachs Global ECS U.S. Research, 3/2/2011)

This blanket opposition to balancing the national budget just like families do every month is especially noteworthy given that Democrats have been saying “we can’t wait” for their stimulus 2.0 after their first $800 billion stimulus failed:

DEMS NOW SAYING “WE CAN’T WAIT” FOR STIMULUS 2.0 AFTER “PASS THIS BILL NOW” FAILED: “President Obama’s growing impatience with Congress’ refusal to ‘pass this bill now’ has launched a new approach — bypassing Congress by taking actions that don’t require congressional support and insisting that ‘We Can’t Wait’ for any more delays on Capitol Hill.” (“President Begins ‘We Can’t Wait’ Economic Push,” Fox News, 10/24/2011)

98 DEMOCRATS ARE OFFICIALLY COSPONSORING STIMULUS 2.0: (Thomas.gov, Accessed 11/08/2011)

AND MORE DEMOCRATS MAY BE GETTING READY TO SIGN ON: DEBBIE WASSERMAN SCHULTZ: “Well, the co-sponsorship is really not reflective of the widespread support that exists in the Democratic caucus and in the country for the American Jobs Act.” (CNN’s “State of the Union,” 10/16/2011)

WHITE HOUSE NO LONGER TALKING ABOUT JOBS “SAVED OR CREATED”—THE NEW LANGUAGE IS JOBS “SUPPORTED” BY STIMULUS: “The American Jobs Act Will Support Nearly 400,000 Education Jobs—Preventing Layoffs and Allowing Thousands More to Be Hired or Rehired.” (“Teacher Jobs At Risk,” The White House, October 2011)

CBO JUST ADMITTED IT’S ” ‘IMPOSSIBLE TO PROVE’ STIMULUS CREATED JOBS”:“SEN. TOOMEY: ‘I know it is your view that the recent huge increase in spending and the corresponding big deficits have generated more economic growth and more job creation that we would have had in the absence of those things. But surely you’d agree, that that essentially asks for a comparison to a counterfactual, and as such, it’s completely impossible to prove?’ DR. DOUGLAS ELMENDORF, director of the CBO: ‘Yes, that’s right, senator.‘” (Remarks from Doug Elmendorf, “CBO Agrees With Toomey: ‘Impossible to Prove’ Stimulus Created Jobs,” Real Clear Politics, 10/27/2011)

BIDEN TELLS CNN: “NOBODY” CAN SAY STIMULUS “DID NOT DO VERY GOOD THINGS” FOR THE ECONOMY: (CNN’s “State Of The Union”, 10/23/11)

MKM PARTNERS: ECONOMY MORE LIKELY TO GET WORSE THAN TO GET BETTER: “We need a period of significantly above-trend growth over a period of years to reduce the unemployment rate appreciably and place income and employment on more stable footing. Unfortunately, in our view, economic conditions are more likely to deteriorate than to firm over the coming months.”(Michael T. Darda, “Unemployment Could Go Higher,” Barron’s, 11/7/2011)

WSJ: WILL TAKE UNTIL 2016 TO MAKE UP ALL LOST JOBS: “In 2011, the economy has added about 120,000 jobs a month. At this pace, it will take until the end of 2016 for the U.S. to replace all the jobs lost during the recession that ended two years ago. After the previous seven post-World War II recessions, it took the economy on average about two to three years to recover job losses.” (Editorial, “When 9% is a Relief,” The Wall Street Journal, 11/7/2011)