Obama’s Broken Deficit Promise Is Dems’ Latest Milestone on Path to Fiscal Ruin

February 23, 2012

Despite Little to Show for a Spending Spree that Ran Up the National Credit Card to Record Levels, Democrats Now Want to Spend Even More

Three years ago today, President Obama made his infamous promise to halve the deficit by the end of his first term in office—yet Americans today face their fourth consecutive year of trillion dollar deficits and an Obama promise terribly broken.
We got here because of the Democrats’ three years of profligate spending and borrowing to pay for their big government agenda, which has produced the fastest ever increase in the national debt.
Yet Democrats continue to call for more new spending, suggesting they have yet to learn their lesson, despite the threat their debt poses to America’s economy.

Three years ago today, President Obama made his infamous promise to halve the deficit by the end of his first term in office—yet Americans today face their fourth consecutive year of trillion dollar deficits and another Obama promise terribly broken:

PRESIDENT OBAMA ON FEB. 23, 2009: “[T]oday I’m pledging to cut the deficit we inherited in half by the end of my first term in office.” (“Remarks by the President and the Vice President at Opening of Fiscal Responsibility Summit,” The White House, 2/23/2009)

ABC NEWS: OBAMA’s “BROKEN DEFICIT PROMISE”: “The 2013 budget the president submitted today does not come close to meeting this promise of being reduced to $650 billion for fiscal year 2013.

“The president noted in that 2009 speech the Obama administration inherited a $1.3 trillion deficit.

“The deficit was similarly $1.3 trillion in 2011, is projected to be $1.15 trillion in 2012, and the president’s budget claims it will be $901 billion in 2013.” (Jake Tapper, “Obama’s Broken Deficit Promise,”ABC News, 2/13/2012)

DEMOCRATS’ RECORD OF TRILLION-DOLLAR DEFICITS: “The Congressional Budget Office on Tuesday predicted the budget deficit will rise to $1.08 trillion in 2012. … The deficit was $1.4 trillion in 2009, $1.3 trillion in 2010 and $1.3 trillion in 2011. The largest deficit recorded before that was $458 billion in 2008.” (Erik Wasson, “CBO Projects $1.08T Deficit, Higher Unemployment,” The Hill, 1/31/2012)

We got here because of the Democrats’ three years of profligate spending and borrowing to pay for their big government agenda, which has produced the fastest ever increase in the national debt:

A $4.8 TRILLION INCREASE IN NATIONAL DEBT SINCE OBAMA TOOK OFFICE: (“The Daily History of the Debt Results,” TreasuryDirect.Gov, Accessed 2/22/2012)

OBAMA RECORD “THE MOST RAPID INCREASE IN THE DEBT UNDER ANY U.S. PRESIDENT”: (Mark Knoller, “National debt has increased $4 trillion under Obama,” CBS News’ Political Hotsheet Blog, 8/22/2011)

NATIONAL DEBT STANDS AT $15.42 TRILLION, LARGER THAN THE NATION’S $15.29 TRILLION ECONOMY: (“The Daily History of the Debt Results,” TreasuryDirect.Gov, Accessed 2/22/2012; “National Economic Accounts,” Bureau of Economic Analysis, Accessed 2/12/2012)

Yet Democrats continue to call for more new spending, suggesting they have yet to learn their lesson, despite the threat their debt poses to America’s economy:

OBAMA CALLING FOR $350 BILLION IN NEW STIMULUS: “In his final budget request before facing voters in November, Obama called for $350 billion in new stimulus to maintain lower payroll taxes, bolster domestic manufacturing, lure jobs back from overseas, hire teachers, retrain workers and fix the nation’s crumbling infrastructure.” (Lori Montgomery, “Obama Offers Stimulus, But Cuts in State, too,” The Washington Post, 2/15/2012)

REUTERS: “OBAMA UNVEILS BIG SPENDING ELECTION-YEAR BUDGET”: (Alister Bull and Laura MacInnis, “Obama Unveils Big Spending Election-Year Budget,” Reuters, 2/13/2012)

NEW BUDGET “LADEN WITH STIMULUS-STYLE INITIATIVES“: “The president’s plan is laden with stimulus-style initiatives: sharp increases for highway construction and school modernization, and a new tax credit for businesses that add jobs.” (Andrew Taylor, “Obama Budget: New Spending with Recycled Tax Ideas,” Associated Press, 2/11/2012)

PELOSI SAYS NEW STIMULUS PLAN IS AN “INNOVATIVE BLUEPRINT”: ” ‘President Obama has laid out an innovative blueprint for restoring opportunity for all Americans and for constructing an economy that is built to last,’ Democratic Leader Nancy Pelosi, D-Calif., stated.” (John Parkinson, “Republicans Detest, Democrats Defend Obama’s Budget,” ABC News, 2/13/2012)

DEBT THREATENS ECONOMIC GROWTH:

“ECONOMIC DAMAGE BEGINS TO RISE” WHEN PUBLIC DEBT HITS 90% OF GDP: “Economists believe that when debt to GDP reaches 90% or so, the economic damage begins to rise. And this doesn’t include the debt that future taxpayers owe current and future retirees through the IOUs in the Social Security ‘trust fund.'” (Editorial, “The Amazing Obama Budget,” The Wall Street Journal, 2/14/2012)

STUDY SHOWS DEFICTS PUT A DRAG ON OUR ECONOMY: “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. (See No Rush for the Exit,” Global Economics Paper, No. 200, June 30, 2010 and “When One Crisis Leads to Another,” US Economics Analyst, 11/04, Jan. 28, 2011.) To avoid this, lawmakers must begin to identify deficit reduction strategies.

“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)

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)