Political Ploys vs. Economic Prosperity
“One of the most successful political ploys is to promise people things without having the money to pay for them. Then, when others want to cut back on the things that have been promised, blame them for lacking the compassion of those who wrote the checks without enough money in the bank to cover them.”
—Thomas Sowell, Reckless Spending, February 22, 2011
Background
Over the past two years, the Congressional Oversight Panel, the Special Inspector General for TARP, and the GAO have all been critical of various efforts by the Obama administration to mitigate defaults and home foreclosures. According to foreclosure data from RealtyTrac, a record 2.9 million homes received foreclosure filings in 2010, up from 2.8 million in 2009, and 2.3 million in 2008, with the prediction that filings will increase 20% in 2011. Programs such as the FHA Refinance Program or the Home Affordable Modification Program (HAMP) rely on growing government debt and prolonging TARP’s involvement in the economy, which is more damaging to homeowners and taxpayers over the long-term. Democrat policies to prevent foreclosures have been an abject failure, costing taxpayers over $1 billion. House Republicans are focused on cutting government spending on failed housing programs (saving more than $40 billion), reducing moral hazard, and restoring market certainty that will enable the economy to grow. The best mortgage assistance program is job creation.
What will your Children inherit?
Record debt: The United States’ current debt stands at $14 trillion, a record high close to surpassing our national Gross Domestic Product of $14.4 trillion. According to former Senator Alan Simpson (R-WY), co-chair of President Obama’s deficit reduction commission, “The trajectory of the debt, deficit and interest will match, except bigger figures, will match any trajectory of Greece, Spain, Portugal, Ireland or Italy. That’s where we are headed. And when that happens, it isn’t six months of slippery slope. It’s off the cliff.”
Record deficits: In fiscal year 2009, the budget deficit exceeded $1 trillion for the first time in history, reaching $1.4 trillion. In fiscal year 2010, the deficit reached $1.3 trillion. The White House expects that the deficit will reach $1.5 trillion in fiscal year 2011. According to Erskine Bowles, former chief of staff to President Bill Clinton and co-chair of President Obama’s deficit reduction commission, “The era of deficit denial is absolutely over…The American people are demanding that we face up to this cancer that is going to destroy our country from within.”
Record monthly deficit: According to the Congressional Budget Office, the federal government reported its largest monthly deficit in history in February 2011—$223 billion. In April 2010, Federal Reserve Chairman Ben Bernanke warned President Obama’s deficit reduction commission: "The path forward contains many difficult trade-offs and choices, but postponing those choices and failing to put the nation's finances on a sustainable long-run trajectory would ultimately do great damage to our economy." Despite such warnings from a year ago, the red ink persists in Democrat fiscal policies. The Washington Times recently reported that the federal government has run a monthly deficit for a record 29 straight months.
It’s for the kids?: America’s record-level debt is equal to $45,500 per American and $127,500 per taxpayer. In other words, thanks to federal government, every child born in the United States today will inherit $45,500 of debt even before that child has had an opportunity to cast one vote. Additionally, with nearly 42 cents of every dollar borrowed, much from foreign nations, Democrats’ deficit spending represents a transfer of wealth from America’s children and grandchildren to future generations in creditor nations such as China. Many Americans understand the American dream is to leave their children, grandchildren, or other loved ones more prosperous or with more economic opportunity. Yet the Democrats’ ploy (i.e. spending money that the nation does not have) is making the American dream just that, a dream. In reality, America’s children and grandchildren are on the verge of inheriting a record amount of debt and higher taxes to match. Excessive government spending will bring neither the jobs Americans need today nor the prosperity desired tomorrow.
For additional information, contact:
The House Republican Conference Policy Office
