Economy Alarm: Democrats’ “Fiscal Responsibility”: Escalating Debt And Record Deficits

October 16, 2009

Democrats’ “Fiscal Responsibility”: Escalating Debt And Record Deficits
Report Says Debt Will Top 109% of GDP in Ten Years

Democrats Promised Fiscal Responsibility, Budget Discipline, Accountability

“Our federal budget should be a statement of our national values. One of those values is fiscal responsibility. Democrats are committed to ending years of irresponsible budget policies that have produced historic deficits…We are committed to auditing the books and subjecting every facet of federal spending to tough budget discipline and accountability, forcing the Congress to choose a new direction and the right priorities for all Americans.” (Nancy Pelosi’s “A New Direction for America, Page 25)

Credibility Crash: Report Projects Largest Debt Ever in Next Ten Years as Deficit Breaks Another Record

The nation’s long-term fiscal outlook remains unsustainable, according to a new GAO analysis showing escalating levels of debt and a surging budget deficit.

The GAO report comes as CBO is expected to announce this afternoon the FY09 deficit will hit a record $1.4 trillion, or 9.9 percent of GDP. It will total $9.1 trillion over the next decade, in line with estimates that were made earlier this month.

According to the GAO analysis, released late Thursday, public debt is projected to surpass by 2019 the record of 109 percent of GDP, set in 1946 – one year after the end of World War II.

The report cited healthcare costs and demographic trends as the two main drivers.

“Absent reform, Social Security, Medicare and Medicaid will account for a growing share of the economy in coming years. The longer action to deal with the nation’s long-term fiscal outlook is delayed, the larger the changes will need to be, increasing the likelihood that they will be disruptive and destabilizing,” said the report.

The analysis was based on historical trends and policy preferences. (Humberto Sanchez, “GAO: Debt Could Break Record in 10 Years,” National Journal’s CongressDaily, 10/16/09)

To read the full article, click here: http://www.nationaljournal.com/congressdaily/cdp_20091016_8892.php?

###