Budgets Matter

Growing Federal Debt Hurts the Economy

Federal Reserve Chairman Bernanke Testifies That the Lack of a Budget Hurts the Economy …

  • When asked if the lack of certainty on tax and spending policies is hurting the economy, Chairman Bernanke candidly responded, “I think it is, because firms like to have certainty [and] like to be able to plan.” (Washington Examiner)

Yet Senator Reid Still Refuses to Pass a Budget

  • Senator Reid recently said that President Obama’s budget is dead on arrival, claiming that “We do not need to bring a budget to the floor this year.” (CQ Today)

And President Obama has broken another promise and failed to cut the deficit in half

  • In 2009, President Obama promised to reduce the deficit by half. However, his most recent budget proposal projects a $1.33 trillion deficit in FY 2012, which is a record-setting fourth straight year of a deficit greater than $1 trillion. (President Obama, February 2009; CBO) 
  • By the end of 2012, President Obama will have presided over the four worst annual deficits since 1947.  (CBO) 
  • President Obama’s FY 2013 budget will add $11.2 trillion to the national debt over the next 10 years. President Obama’s budget will increase the total debt per person to $75,000 in 2022, up from $33,000 per person in 2008. (Republican Staff, Senate Budget Committee)
  • Additionally, President Obama is proposing a massive tax increase of $1.9 trillion at a time when the U.S. economy can least afford it. These tax increases target small business owners and investors who are a key source of job creation and economic growth.  (Republican Staff, Senate Budget Committee)

Under President Obama, the Debt Has Exploded and Jobs Have Disappeared

Unsustainable Debt Reduces Economic Growth

  • Economists have concluded that economic growth for countries with debt above 90 percent of GDP tends to be between 1 and 2 percent lower when compared to countries with lower debt-to-GDP ratios. Total national debt in the U.S. now exceeds 100 percent of GDP.  (Republican Staff, Senate Budget Committee)

The Middle Class Shrinks as the Government Grows