Dems’ Plan: Eight Years of Trillion-Dollar Deficits

October 8, 2012

Dems’ Plan: Eight Years of Trillion-Dollar Deficits

To Understand Democrats’ Spending Plans for the Next Four Years, Just Look to the Last Four Years of Trillion-Dollar Deficits

Among the dubious statements President Obama made in the debate last Wednesday was his claim to have a plan to reduce the deficit by four trillion dollars—a bizarre assertion from a president and a party that ran up trillion dollar deficits for four straight years.
Indeed, the debt increase under Obama and his Democrat allies in Congress is without comparison in American history.
The truth is the Democrats’ debt explosion is hurting America’s economic growth and the toll will only get worse as Democrats’ spending addiction balloons the debt even larger.

Among the dubious statements President Obama made in the debate last Wednesday was his claim to have a plan to reduce the deficit by four trillion dollars—a bizarre assertion from a president and a party that ran up trillion dollar deficits for four straight years:

OBAMA CLAIMS TO HAVE A “$4 TRILLION PLAN” TO REDUCE THE DEBT: “That’s what we’ve done, made some adjustments to it, and we’re putting it forward before Congress right now — a $4 trillion plan” (“Remarks by the President and Governor Romney in the First Presidential Debate,” The White House, 10/4/2012)

THE TRUTH? OBAMA AND DEMOCRATS HAVE RUN FOUR STRAIGHT YEARS OF TRILLION-DOLLAR DEFICITS: (Andrew Taylor, “CBO Tallies 2012 Deficit at $1.1T,” Associated Press, 10/5/2012)

PROMISE BROKEN: OBAMA PLEDGED TO “CUT THE DEFICIT WE INHERITED IN HALF BY THE ENTIRE OF MY FIRST TERM IN OFFICE”: “Today I am pledging to cut the deficit we inherited in half by the end of my first term in office. Now, this will not be easy. It will require us to make difficult decisions and face challenges we’ve long neglected. But I refuse to leave our children with a debt that they cannot repay, and that means taking responsibility right now, in this administration, for getting our spending under control.” (Molly Moorhead, “Romney Says Obama Promised to Cut the Deficit in Half,” Politifact, 10/3/2012)

Indeed, the debt increase under Obama and his Democrat allies in Congress is without comparison in American history:

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)

$5.53 TRILLION INCREASE IN NATIONAL DEBT SINCE OBAMA TOOK OFFICE: (“The Daily History of the Debt Results,” Bureau of the Public Debt, Accessed 10/5/2012)

NATIONAL DEBT CURRENTLY STANDS AT $16.15 TRILLION; SIZE OF NATION’S ECONOMY AT $15.59 TRILLION: (“The Daily History of the Debt Results,” Bureau of the Public Debt, Accessed 10/5/2012; Bureau of Economic Analysis, Accessed 9/18/2012)

THREE YEARS AND TWO MONTHS OF OBAMA WAS 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)

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)

STUDY: ANNUAL COST OF OBAMA’S DEBT AMOUNTS TO $4,000 A YEAR IN HIGHER TAXES ON THE MIDDLE CLASS: “In a new paper, AEI’s Aspen Gorry and Matt Jensen look at the real annual cost of servicing the debt for households at various levels of income — including a potentially higher tax burden. As the table below illustrates, a household making between $100,000 and $200,000 a year could find its tax liability higher by roughly $2,400 every year. Over ten years, that works out to $24,000. And when you add in the debt already accrued the past four years under President Obama (the second table), that’s another $1,600 a year. So now we are now talking about $4,000 a year, $40,000 over ten years.” (James Pethokoukis, “Study: Obama’s Big Budget Deficits Could Mean A $4,000 A Year Middle-Class Tax Hike,” American Enterprise Institute, 10/2/12)

CHINA OWNS $1.15 TRILLION IN U.S. DEBT: (“Major Foreign Holders of Treasury Securities,” U.S. Department of the Treasury, 9/18/2012)

The truth is the Democrats’ debt explosion is hurting America’s economic growth and the toll will only get worse as Democrats’ spending addiction balloons the debt even larger:

CBO: OBAMA BUDGET WILL “HURT THE ECONOMY IN THE LONG TERM”: (Erik Wasson, “CBO Estimates Obama’s 2013 Budget Would Hit Economic Growth,” The Hill, 4/20/2012)

STUDY: ECONOMIC GROWTH TAKES 25% HIT FROM DEBT LEVELS AT MORE THAN 90 PERCENT OF ECONOMY: (Rich Miller, “Reinharts, Rogoff See Huge Output Losses From High Debt,” Bloomberg Businessweek, 4/30/2012)

GOLDMAN SACHS RESEARCH: STIMULUS SPENDING “WILL EVENTUALLY LEAD TO A DRAG,” HIGHER DEBT LEVELS TAKE ECONOMIC TOLL: “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 LINKS GOVERNMENT DEBT TO SLOWER ECONOMIC GROWTH: “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)

Four Years of Trickle-Down Government Has Buried the Middle Class http://ow.ly/egYDD