CBO Report Shows There's No Substitute For Growth

Posted by Brian Patrick on


Today, CBO released a report showing the nation’s long term fiscal outlook has gotten even worse than last year, further threatening our economic health. Democrats continue to ignore a major component of deficit reduction – economic growth. To date, House Republicans have put forward the only concrete plan to manage down our debt, spur economic growth and job creation and allow businesses to grow, compete and begin hiring again. 

Democrats’ Failure To Put Forward A Pro-Growth Jobs Plan Has Worsened Our Nation’s Debt Crisis:

  • The Nation’s Long Term Budget Outlook Has Dramatically Worsened Since Last Year. The Congressional Budget Office issued (another) grim forecast today regarding the long-term outlook of the federal budget. According to a new CBO report, U.S. public debt is set to reach 100 percent of GDP in 2021, and 190 percent of GDP in 2035 if nothing is done to change its current trajectory. That is monumentally worse than was predicted in last year’s report, when the CBO estimated that debt would reach just 80 percent of GDP in 2035. (National Review, 6/22/11)
  • CBO “Understates The Severity Of The Long Term Budget Problem” Because It Doesn’t Include Snowballing Effects Of Growing Debt or the Negative Impact Of Higher Tax Rates Have On Growth. CBO said that its economic and fiscal projections "understate the severity of the long-term budget problem" because they don't take into account the snowballing effects that growing debt will have on the economy or the impact of any tax increases, which could occur if Congress does not extend current low rates beyond their 2012 expiration. (Reuters, 6/22/11)

Americans Continue To Reject The Democrats’ Failed Approach To The Economy:

  • Less Than 10% Of Americans Believe The Economy Will Recover In The Next 2 Years. The gloom covers the immediate future, with fewer than 1 in 10 people expecting unemployment to return to pre-recession levels within the next two years, and it extends to the next generation. More than half of respondents say their children are destined to have a lower standard of living than they do, upending a traditional touchstone of the American Dream. (Bloomberg, 6/22/11)
  • 44% Of Americans Feel They Are Worse Off Now Than When President Obama Took Office. By a 44 percent to 34 percent margin, Americans say they believe they are worse off than when President Barack Obama took office in early 2009, when the U.S. was in the depths of a recession compounded by the September 2008 financial crisis and the economy was losing as many as 820,000 jobs a month. (Bloomberg, 6/22/11)

A Pro-Growth Strategy Would Help Put Americans Back To Work and Generate Revenue:

  • The Majority Of Americans Favor The Republican Pro-Growth Approach To Creating Jobs and Growing The Economy. Republican criticism of the federal budget growth has gained traction with the public. Fifty-five percent of poll respondents say cuts in spending and taxes would be more likely to bring down unemployment than would maintaining or increasing government spending. (Politico’s Playbook, 6/22/11)
  • Boosting Economic Growth Will Generate Revenues. A 4% growth rate would mean almost $4 trillion in additional output in the year 2020, $10 trillion more in 2030, $21 trillion more in 2040, and an astounding $38 trillion more in 2050, when the economy would be more than twice as large had we kept growing at 2%. Over this period, with an arbitrarily chosen 20% tax-to-GDP ratio, a 4% growth rate would generate $109 trillion more revenue than a 2% growth rate. (Forbes, 5/27/11)


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