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Under Dems, Debt As Far as the Eye Can See

June 5, 2012

European-Style Fiscal Crisis Could Hit America if Democrats Have Their Way and the Debt Continues to Grow 

  • The Congressional Budget Office’s new projection on America’s long-term budget outlook foresees debt doubling the size of the economy if we continue the Democrats’ policies.
  • The long-term debt outlook is terrifying, but the truth is that the Democrats’ irresponsible spending and borrowing has already taken its toll. America has seen a record increase in the national debt under President Obama.
  • Economic research has linked rising national debt to lower economic growth. As the economy continues to struggle, we just can’t afford more of the Democrats’ failed spending and borrowing.

The Congressional Budget Office’s new projection on America’s long-term budget outlook foresees debt doubling the size of the economy if we continue the Democrats’ policies:

“CBO WARNS OF GRIM LONG-TERM DEBT OUTLOOK”: (Erik Wasson, “CBO Warns of Grim Long-Term Debt Outlook,” The Hill, 6/5/2012) 

DEBT ON TRACK TO DOUBLE THE SIZE OF THE ECONOMY: (Erik Wasson, “CBO Warns of Grim Long-Term Debt Outlook,” The Hill, 6/5/2012) 

RISING DEBT LEVELS COULD SPARK EUROPEAN-STYLE FISCAL CRISIS:“Many economists have warned that if debt held by the public approaches 100 percent of GDP it can bring on the kind of fiscal crisis being felt in European countries today, in which governments must suddenly slash spending and layoff workers in the face of rising interest rates caused by spooked investors.” (Erik Wasson, “CBO Warns of Grim Long-Term Debt Outlook,” The Hill, 6/5/2012)

DEBT SO LARGE, CBO CAN’T ESTIMATE ITS ECONOMIC EFFECTS: “When the government budget scorekeepers took into account the worst-case scenario impact of debt on the U.S. economy, its economic forecasting model, well, broke: ‘Under the assumptions leading to the most negative effect on GNP, debt would reach 250 percent of GDP by 2035. CBO’s model cannot reliably estimate GNP after debt reaches that amount, in the agency’s judgment…’”(James Pethokoukis, “CBO: Massive Rise in U.S. Debt Crashes Our Economic Forecasting Model in 2035,” The American, 6/5/2012)

The long-term debt outlook is terrifying, but the truth is that the Democrats’ irresponsible spending and borrowing has already taken its toll. America has seen a record increase in the national debt under President Obama:

$5.10 TRILLION INCREASE IN NATIONAL DEBT SINCE OBAMA TOOK OFFICE:(“The Daily History of the Debt Results,” TreasuryDirect.Gov, Accessed 6/5/2012) 

CURRENT U.S. DEBT LEVEL AT 102% OF THE SIZE OF THE ECONOMY: NATIONAL DEBT STANDS AT $15.72 TRILLION, LARGER THAN THE NATION’S $15.46 TRILLION ECONOMY: (“The Daily History of the Debt Results,”TreasuryDirect.Gov, Accessed 6/5/2012; “National Economic Accounts,” Bureau of Economic Analysis, Accessed 5/21/2012)

OBAMA DEBT INCREASE HAS ALREADY ECLIPSED EIGHT YEARS OF PREDECESSOR: (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) 

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)

AND DEMOCRATS WANT MORE OF THE SAME:

CBO: OBAMA BUDGET WILL “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 TO 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)

Economic research has linked rising national debt to lower economic growth. As the economy continues to struggle, we just can’t afford more of the Democrats’ failed spending and borrowing:

U.S. COULD FACE “MASSIVE” LOSSES IN ECONOMIC GROWTH DUE TO DEBT: “The U.S. and other developed economies with high public debt potentially face ‘massive’ losses of output lasting more than a decade, even if their interest rates remain low, according to new research by economists Carmen and Vincent Reinhart and Kenneth Rogoff.” (Rich Miller, “Reinharts, Rogoff See Huge Output Losses From High Debt,” Bloomberg Businessweek, 4/30/2012)

DEBT LEVELS MORE THAN 90 PERCENT OF ECONOMY COULD REDUCE ECONOMIC GROWTH BY 25%: “In a paper published today on the National Bureau of Economic Research’s website, they found that countries with debts exceeding 90 percent of the economy historically have experienced subpar economic growth for more than 20 years. That has left output at the end of the period a quarter below where it would have been otherwise.” (Rich Miller, “Reinharts, Rogoff See Huge Output Losses From High Debt,” Bloomberg Businessweek, 4/30/2012)

“THE LONG-TERM RISKS OF HIGH DEBT ARE REAL” AND “GROWTH EFFECTS ARE SIGNIFICANT”: (Rich Miller, “Reinharts, Rogoff See Huge Output Losses From High Debt,” Bloomberg Businessweek, 4/30/2012)

OMB: UNDER DEMOCRATS’ FAILED POLICIES, DEBT HAS EXCEEDED 90% OF GDP FOR THE LAST TWO YEARS AND WILL CONTINUE TO FOR YEARS:“Gross federal U.S. debt has exceeded 90 percent of GDP for the last two years and is projected to remain above that level at least through 2017, according to the White House’s Office of Management and Budget.” (Rich Miller, “Reinharts, Rogoff See Huge Output Losses From High Debt,” Bloomberg Businessweek, 4/30/2012)