CBO: Obama’s Spending Spree Will Make a Bad Economy Worse

As Obama’s Share of the National Debt Crosses $5 Trillion, New Report Predicts Democrats’ Spending Addiction Will Hurt Economic Growth 

• A new report from the Congressional Budget Office offers the latest proof that the Democrats’ policies are making a bad economy worse. CBO predicts that President Obama’s proposed budget will hurt job creators and harm America’s long-term economic growth.
• Last week President Obama’s share of the national debt surpassed $5 trillion, a startling reminder that Obama remains America’s “undisputed debt king” as he and the Democrats keep fueling their spending addiction.
• Democrats have had plenty of warnings that their policies are threatening economic growth. A growing body of economic research links the rising national debt burden to lower economic growth, but Democrats still won’t stop spending money we don’t have.

A new report from the Congressional Budget Office offers the latest proof that the Democrats’ policies are making a bad economy worse. CBO predicts that President Obama’s proposed budget will hurt job creators and harm America’s long-term economic growth:

CBO: OBAMA BUDGET WILL “HURT THE ECONOMY IN THE LONG TERM”:“The nonpartisan Congressional Budget Office said Friday that President Obama’s 2013 budget will hurt the economy in the long term, arguing the larger deficits it would produce would reduce the amount of capital available to businesses.” (Erik Wasson, “CBO Estimates Obama 2013 Budget Will Hit Economic Growth,” The Hill, 4/20/2012)

OBAMA PROPOSALS “WOULD REDUCE ECONOMIC OUTPUT BY BETWEEN 0.5 PERCENT AND 2.2 PERCENT”: “After five years, the CBO says, the Obama proposals would reduce economic output by between 0.5 percent and 2.2 percent.” (Erik Wasson, “CBO Estimates Obama 2013 Budget Will Hit Economic Growth,”The Hill, 4/20/2012)

DEMOCRATS’ SPENDING SPREE WOULD “REDUC[E] THE FUNDS BUSINESS COULD USE TOE EXPAND AND HIRE”: “Larger deficits caused by the budget would cause the government to issue more bonds, sucking up private capital to finance its debts and thereby reducing the funds businesses could use to expand and hire, the CBO said. An increased tax on capital gains included in the president’s plan would also tend to reduce private capital, it says.” (Erik Wasson, “CBO Estimates Obama 2013 Budget Will Hit Economic Growth,” The Hill, 4/20/2012) 

Last week President Obama’s share of the national debt surpassed $5 trillion, a startling reminder that Obama remains America’s “undisputed debt king” as he and the Democrats keep fueling their spending addiction:

TOTAL DEBT INCREASE UNDER OBAMA NOW AT $5.03 TRILLION: (“The Daily History of the Debt Results,” Treasury Direct, Accessed 4/20/2012) 

“NATIONAL DEBT HAS INCREASED MORE UNDER OBAMA THAN UNDER BUSH”: (Mark Knoller, “National Debt Has Increased More Under Obama than Under Bush,” CBS News, 3/19/2012)

THREE YEARS AND TWO MONTHS OF OBAMA IS MORE DEBT THAN EIGHT YEARS OF PREDECESSOR: “The National Debt has now increased more during President Obama’s three years and two months in office than it did during 8 years of the George W. Bush presidency.

“The Debt rose $4.899 trillion during the two terms of the Bush presidency. It has now gone up $4.939 trillion since President Obama took office.” (Mark Knoller, “National Debt Has Increased More Under Obama than Under Bush,” CBS News, 3/19/2012)

POLITIFACT SAID LAST YEAR THAT OBAMA WAS THE “UNDISPUTED DEBT KING OF THE LAST FIVE PRESIDENTS”: “Obama is the undisputed debt king of the last five presidents, rather than the guy who added a piddling mount to the debt.” (Louis Jacobson, “Nancy Pelosi Posts Questionable Chart on Debt Accumulation by Barack Obama, Predecessors,” Politifact, 5/19/2011) 

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 $15.66 TRILLION, LARGER THAN THE NATION’S $15.32 TRILLION ECONOMY: (“The Daily History of the Debt Results,”TreasuryDirect.Gov, Accessed 4/20/2012; “National Economic Accounts,” Bureau of Economic Analysis, Accessed 4/20/2012)

YET DEMOCRATS CONTINUE TO SPEND MORE MONEY THAT WE DON’T HAVE:

“CBO: EXPLODING DEBT UNDER OBAMA POLICIES”: (David Rogers, “CBO: Exploding Debt Under Obama Policies,” Politico, 3/16/2012) 

“OBAMA’S TAX AND SPENDING POLICIES WILL YIELD $6.4 TRILLION OVER THE NEXT DECADE”: “The Congressional Budget Office said Friday that President Barack Obama’s tax and spending policies will yield $6.4 trillion in deficits over the next decade, more than double the shortfall in CBO’s own fiscal baseline — even after taking credit for reduced war costs.” (David Rogers, “CBO: Exploding Debt Under Obama Policies,” Politico, 3/16/2012) 

“EVEN IF OBAMA WERE TO GET HIS WAY ON ALL FRONTS,” PUBLIC DEBT WOULD “NEARLY DOUBLE AGAIN” TO $18.8 TRILLION IN 2022: “That said, the picture is grim, and even if Obama were to get his way on all fronts, the federal debt held by the public would nearly double again from $10.1 trillion at the end of 2011 to $18.8 trillion at the end of 2022.” (David Rogers, “CBO: Exploding Debt Under Obama Policies,” Politico, 3/16/2012) 

OBAMA’S BUDGET ENSURES DEBT “WILL CONTINUE TO RISE AS FAR AS THE EYE CAN SEE”: (Mark Knoller, “National Debt Has Increased More Under Obama than Under Bush,”CBS News, 3/19/2012)

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)

Democrats have had plenty of warnings that their policies are threatening economic growth. A growing body of economic research links the rising national debt burden to lower economic growth, but Democrats still won’t stop spending money we don’t have: 

“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)