Fed Chairman Warns of “Unsustainable” Deficits; Where Is The Democrats’ Budget?
A new Obama Administration report provides further evidence that Washington Democrats’ out-of-control spending spree is hurting our economy amid fresh warnings from Federal Reserve Chairman Ben Bernanke about the “unsustainable path” of our budget deficit.
Released “with no fanfare,” the Treasury Department’s “Annual Report on Public Debt” states that our $13-trillion-and-rising national debt now measures out at more than 90 percent of our economy. This is a dubious benchmark at which, according to an economic expert who testified before the President’s fiscal commission last week, growth “deteriorates markedly” – by roughly one percent, which will cost the American economy nearly a million jobs. In his testimony before the House Budget Committee today, Bernanke echoed that warning, stating that “unless we as a nation make a strong commitment to fiscal responsibility, in the longer run, we will have neither financial stability nor healthy economic growth.”
Despite the pleas of these and other noted economists, Washington Democrats and their liberal special interest allies still aren’t listening. In fact, White House budget director Peter Orszag made the stunning admission yesterday that GOP proposals to cut spending now would “go nowhere” in this Congress. One Big Labor official said yesterday, “We do not have a short-term deficit crisis in this country.” We don’t?
Reuters highlights the new Treasury Department report that links spiraling debt and job losses:
“The U.S. debt will top $13.6 trillion this year and climb to an estimated $19.6 trillion by 2015, according to a Treasury Department report to Congress. The report that was sent to lawmakers Friday night with no fanfare said the ratio of debt to the gross domestic product would rise to 102 percent by 2015 from 93 percent this year.
“‘The president’s economic experts say a 1 percent increase in GDP can create almost 1 million jobs, and that 1 percent is what experts think we are losing because of the debt’s massive drag on our economy,’ said Republican Representative Dave Camp, who publicized the report. He was referring to recent testimony by University of Maryland Professor Carmen Reinhart to the bipartisan fiscal commission, which was created by President Barack Obama to recommend ways to reduce the deficit, which said debt topping 90 percent of GDP could slow economic growth.”
Under the headline, “U.S. debt reaches level at which economic growth begins to slow,” The Hill reported on Dr. Reinhart’s recent testimony to the debt commission:
“When gross debt hits 90 percent of GDP, Reinhart told the commission during a hearing in the Capitol, growth ‘deteriorates markedly.’ Median growth rates fall by 1 percent, and average growth rates fall ‘considerably more,’ she said. Reinhart said the commission shouldn’t wait to put in place a plan to rein in deficits.”
As Ways & Means Republicans led by Rep. Dave Camp (MI) – who first called attention to this stunning report – have noted, “According to the Administration’s Romer-Bernstein economic model, a one percent increase in GDP could create 979,000 jobs.” Nevertheless, Democrats do not intend to pass a budget this year, putting their own political interests ahead the critical opportunity they have to create jobs and free up our economy.
Just because Democrats are sitting on the sidelines while our debt spirals out of control doesn’t mean we stop trying to cut spending now. Last month, House Budget Committee Republicans, led by Ranking Member Paul Ryan (WI) and Vice Ranking Member Jeb Hensarling (TX), unveiled a series of specific spending cuts and budget reforms to help spur job creation and get Washington’s fiscal house in order.
(Source: Boehner)
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