The Republican Caucus at Harvard Kennedy School
by Michael Sechrist on November 11, 2009 in Dems v. Reps, Opinion
During the 2008 presidential election cycle, President Bush took a beating by many on the growing deficit. In a 2007 interview, then Democratic presidential candidate Barack Obama spoke with clarity and command when he said that, “[The Bush Administration] has been the fiscally most irresponsible administration that we have seen. We have increased the national debt, almost doubled it, since George Bush took office; it is now over $9 trillion dollars, and that is money that we are all going to have to pay back.”
Obama’s stance dovetailed nicely with a factsheet put out by House Democratic Majority Leader Steny Hoyer at the time. His factsheet graphically showed that President Bush borrowed more from foreign governments and financial institutions than the first 42 U.S. presidents combined. It went on to say that the “increased amount of debt held by foreign creditors undermines America’s national security. The United States is more vulnerable to geopolitical pressures in unstable parts of the world.”
Most Republicans would agree that fiscal deficits make our government more vulnerable to global instability. In the past 20 years, foreign holdings of U.S. federal debt have increased from 19 percent to 49 percent. That means that over half of our federal debt is held by countries whose interests may not be our own. China, Japan, the U.K. and oil exporting countries are the biggest holders of U.S. Treasury securities.
But according to The New York Times this past summer, “…Mr. Obama does not have a realistic plan for eliminating the deficit, despite what his advisers have suggested.” His plans to halve the federal budget by 2013 means little considering that the federal budget will be twice what it is today even after such a reduction. Obama’s $787 billion stimulus package contradicts a key DNC tenet that “[Democrats] will maintain fiscal responsibility, so that we do not mortgage our children’s future on a mountain of debt.”
In fairness, President Bush raised the national debt $1.8 trillion in his first seven years in office. By the time his second term ended, the national debt stood almost $4.9 trillion higher than when he first entered. Obama recently said he “found this national debt, doubled, wrapped in a big bow waiting for me as I stepped into the Oval Office.” Well he is re-gifting it now for future generations.
Since taking office, President Obama has added $1.8 trillion to the national debt. What President Bush did in seven years, Obama is doing in his first year. If the Obama administration’s budget projections are right, it will take the national debt four years to rise to what it did in eight under President Bush. But White House economists’ projections are subject to change. For instance, the deepening recession made the Office of Management and Budget recalculate the national debt this summer. In just five months, from February to August 2009, OMB calculated that $2 trillion was added to the national debt. This will require the national debt limit, which Congress approves, to be increased by another trillion dollars this month to $13 trillion. This is the second increase since Obama took office in February.
As discussed, the problem does not lie with one party. It is a problem that all Americans, on both sides of the aisle, need to address. Right now, there is no light at the end of the tunnel. According to the Peter G. Peterson Foundation, beyond our explicit liabilities of $13 trillion, implicit liabilities in Medicare and Social Security run close to $43 trillion. The total deficit then, all told, runs closer to $56 trillion, which comes down to $184,000 for every person living in the U.S.
The GAO describes this path as “unsustainable.” They estimate that government debt as a percentage of GDP will rise from 90 percent today to “170 percent by 2040 to over 600 percent by 2080 – far exceeding the historical high of 109 percent that occurred immediately following WWII.” By comparison, the E.U. does not let countries accede to it if debt levels exceed 60 percent of GDP; so by all accounts, we would not be let in.
Right now, when you type in “national debt” on the DNC website, you get a broken link. As voters, we need to demand that our elected officials move from this broken path of spending and burdening future generations. We must demand that a plan be produced and executed. Our security, in all areas, is at stake.
To further highlight this important issue, the HKS GOP caucus will host a series of events next semester, during National Debt Week. Details are currently being finalized, but we encourage the HKS Democratic Caucus to join us in supporting the events. We hope that all students will attend at least one event so that we can collaborate on fixing this important issue. Stay tuned.
Comments
Got something to say?
