Congress Moving to Increase the National Debt Shows Democrats Are Out of Touch

December 17, 2009 RSS Feed Print
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By Mary Kate Cary, Thomas Jefferson Street blog

The Senate passed a $447 billion omnibus spending bill over the weekend, one that increases federal spending at government agencies by some $48 billion, a 12 percent increase from 2009. According to the Wall Street Journal, "That increase—when inflation is negligible—is in addition to the $311 billion in stimulus already authorized or out the door for these programs. Adding this new stash means that federal agencies will have received a nearly 70% increase in the last two years."

That whopping 70 percent increase in spending on government programs also means that Congress will now have to vote to "raise the federal debt ceiling by at least $1.8 trillion," according to the Washington Post. Note the Post reports they'll raise the debt ceiling "BY" $1.8 trillion, not "TO" $1.8 trillion.

Really, what planet are these Democrats on? When the president unveiled his much-anticipated "jobs" package last week—he's too smart to call it a second stimulus plan—it seemed like he spent a lot more time talking about tax incentives for winterizing our homes than about helping businesses create jobs. In fact, some pundits called it "cash for caulkers." All joking aside, the proposals add even more to the uncertainty facing small business owners right now, whether it's from cap and trade, healthcare, or even the on-again off-again one-year capital gains tax cut he's proposing for new investments in small business stock. It's no wonder with so much unpredictability that businesses can't plan ahead, much less hire new workers.

When you combine this massive spending bill with the trillion-dollar-plus healthcare reform proposals Congress is moving towards, you have to wonder. Earlier this week, Sen. Claire McCaskill of Missouri announced she'd "absolutely" vote against healthcare reform if it added to the deficit. Later she joined Democratic Sens. Evan Bayh of Indiana and Russ Feingold of Wisconsin in voting against the omnibus spending bill, and Bayh urged the president to veto the whole thing. Bayh was quoted in Politico saying that Washington politicians "are totally out of touch with the sacrifices middle-class Americans are making ... We have to take the credit card away from the politicians who just want to spend, spend, spend." The Republicans couldn't have said it better.

Tags:
Democratic Party,
federal budget

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I would rather be employed so

that it is possible to afford the insurance plan of my choosing .The liberals insistence that a budget so mired in red ink become administrator of universal health care is not rational or logical.

JP of TX 12:53AM December 21, 2009

Point 1:

Well, it does and doesn't--even if the US were on the verge of default, which it probably won't. There's always a "Plan B or C." America's financial credibility has been tested a couple times before and each time it fell with grace. Sure, people panicked when Nixon dropped the gold standard, but it was overblown in hindsight. (Just look at the history of the Fed, post-WWII account surpluses and deficits, and the IMF.)

The fact is the modern world was built on US debt. The Marshall Plan's significance is often overstated and misunderstood. What Europe built with funds procured under the Marshall Plan is less important than the funds themselves. In fact, a lot of the money just stayed in the national bank, where it did more good than you might think. It's the money that mattered. WWII butchered the richest and most powerful nations of the early 20th century and left them broke and broken. Even worse off were some of their colonies. The only country in the world that had the capacity and the financial stability to recapitalize these countries was the US. In addition to government grants and loans, American companies, investors and public institutions liberally issued stock, debt and bonds to provide equity for global markets. This was the only way to ensure the expansion of trade. The flow of capital outside the US into foreign accounts was also essential in the fight against communism.

Point 2:

It is in China and Japan's best interests to hold the securities for as long as possible and sell them off as slow as possible. If they're not careful, inflation may rise sharply. Let's say Japan converts some of it US treasuries for yen dominated debt designed to pay off some of its existing debt. However, Japan has to be extremely cautious not to put additional inflationary pressure on the yen. A stronger yen hurts Japan more than it supports it. Japan doesn't want to increase its already high cost of living.

Point 3:

Our debt isn't really that high. It's not that much more relative to our economy than in 1992.

Point 4:

All money is debt. All stock is debt. Keep in mind the US is by far the most capitalized economy in the world. It is also the largest foreign investor. Americans have a lot of debt but they also own a lot of debt in other countries and in their own.

Sam of NJ 1:26AM December 20, 2009

Any congressman who votes to raise the debt limit of the country should be tarred and feathered and run out of town on a rail. We elected these people to solve problems, not create new ones.

allen of MS 5:03PM December 19, 2009

Mary Kate Cary

Mary Kate Cary

Mary Kate Cary is a former White House speechwriter for President George H.W. Bush. She currently writes speeches for political and business leaders.

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