So this is what the “age of budget austerity” looks like?
Yesterday, the Senate voted against a measure to disapprove of Obama’s request for an additional $1.2 trillion of debt. Every Democrat (except for Ben Nelson and Joe Manchin) voted against the resolution. Consequently, pursuant to the Budget Control Act (the “debt ceiling deal”), Obama will automatically get his new credit card. Our debt will increase by another $1.2 trillion, topping $16.4 trillion by the end of the year.
Here are the relevant numbers that should define Obama’s presidency, yet they will not be disseminated in the major media. When Obama took office, the total federal debt stood at $10.6 trillion. By the end of his first term, the debt will be at least $16.4 trillion, an increase of $5.8 trillion. To put that in perspective, it took us until late 2001 (from our nation’s founding) to accrue $5.8 trillion in debt. Even President Bush, who was a big-spending Republican, racked up “only” $4.9 trillion over 8 years.
Let’s now explicate the debt figures as a percentage of our economy. Our total federal debt and our GDP stand at parity. The debt is $15.281 trillion, while our GDP is 15.294 trillion. It is unlikely that our economy will grow by more than a 2-2.5% annualized rate in the coming year. On the other hand, with the additional $1.2 trillion of debt, our national debt will grow by 7.9%. In other words, our GDP will remain below our gross debt indefinitely.
Unfortunately, the Republicans are not innocent from reproach in this debt crisis. While every Republican except for Scott Brown voted for the resolution of disapproval, most of them supported the debt ceiling deal that engendered this disaster in the first place. Only 19 of the 47 Senate Republicans opposed the debt deal, which gave Obama a defacto blank check to raise $2.1 trillion in debt without any transformational budget reforms. We have already raised the debt ceiling by $900 billion since passage of the Budget Out of Control Act. Today, by default, Obama was granted the rest.
This just underscores the need to focus on congressional races. We might win back the Senate in November; however, if we continue to elect those who will vote for similar inane legislation, it will be worthless.
Cross-posted from The Madison Project