Morning Bell: We Can’t Spend Our Way to Recovery
Conn Carroll /
When President Barack Obama was selling his economic stimulus plan to the American people, he promised that, if enacted, the legislation would prevent unemployment from rising above 8%. $3 billion in Cash for Clunkers bailouts, $10 billion in government union bailouts, $16 billion in Medicaid bailouts, $13 billion in home buyer tax credits, and $814 billion in stimulus act spending later the nation’s unemployment rate stands at 9.5%. And now the Congressional Budget Office (CBO) says that number is not going to come down any time soon. Yesterday, the CBO released its 10-year budget baseline predicting that the economy will grow at an anemic 2% next year (half the growth rate it predicted last summer) and that unemployment will remain above 9% through the rest of this year. And that wasn’t even the worst news.
The CBO also said the federal deficit will surpass $1.3 trillion this year, and predicted an additional $6.2 trillion in deficits over the next decade. But even these numbers are too rosy. By law the CBO only analyzes federal budgets as written ignoring almost certain policy changes that include the annual “doc fix” (stopping cuts to doctor’s Medicare payments), rising discretionary spending, and tax changes. Using more realistic assumptions, The Heritage Foundation’s Brian Riedl shows that: 1) annual budget deficits will never fall below $1 trillion and will reach nearly $2 trillion by 2020; 2) the national debt held by the public will pass 100% of gross domestic product (GDP) by 2020; 3) by 2020 half of all income tax revenues will go to pay just the interest on our $23 trillion national debt.
Even leftist economists are now admitting that this administration’s borrow and spend economic plan has been a complete failure. But instead of cutting their losses, the left wants to double down … with your tax dollars. Last month, Vice President Joe Biden told ABC News that the only problem with the Obama administration’s economic policies was that they failed to spend more and drive us into debt faster. This is insanity. It must stop. To get our country back on the right track The Heritage Foundation’s Solutions for America chapter on Reining in Runaway Spending and Deficits recommends: (more…)