If you’ve been keeping up with the goings-on in Washington, D.C., lately, you’re probably aware of the fact that the federal government is in the middle of a budgetary crisis of epic proportions.
With a government shutdown temporarily averted, and the Paul Ryan 2012 budget proposal on its way to the Senate, Congress’ next battle will be fought over whether or not to raise the debt ceiling.
If Democrats and Republicans fail to hammer out an agreement before the deficit reaches its $14.3 trillion limit, the U.S. will be legally prohibited from borrowing more money. The federal government will then default on its existing debt obligations and the country will go bankrupt.
Republicans, staying true to their obstructionist ways, have vowed to block all efforts to avert this impending crisis unless the Democrats agree to more significant cuts in spending (as if the $38.5 billion in cuts that were approved in the last budget resolution weren’t enough).
Democrats have acknowledged that deep spending cuts will have to be made in order to come to an agreement, but are weary of the effects it will have on the economy, and rightfully so.
While it is true that a federal deficit in excess of $14 trillion is unsustainable and will need to be reduced at some point, what many on the right have failed to recognize is that the two years of deficit spending has kept the economy from spiraling into a much deeper recession.
The Bush administration, on the other hand, spent billions on a failed prescription drug program, two wars and tax cuts for the wealthy, while most of the Obama administration’s expenditures have been aimed at job creation and economic growth.
The $800 billion stimulus package cut taxes for the middle class, poured millions into shovel-ready infrastructure projects and, according to the non-partisan Congressional Budget Office, created between 1.4 million to 3.3 million jobs.
As a result, Americans are earning and spending more and, for the most part, employment has trended upward.
Contrary to what most Republicans will tell you, the benefits of deficit spending have far outweighed its detriments. In a recession, raising the debt ceiling, which will allow the government to incur more debt, is key to maintaining positive economic growth and will prevent the country from going bankrupt.
Once the economy has sufficiently recovered, unemployment has trickled down and wages are back to normal, Americans will have more taxable income, which will provide the government with the revenue to reduce the deficit.
But the Republican solution to this problem, slashing spending by unprecedented amounts, will counteract the effects of the stimulus, and almost certainly stunt, or even reverse, the pace of the economic recovery.
If the GOP’s draconian spending cuts are approved and implemented, a double-dip recession will be just around the bend.
— Nyles Kendall is a political science junior. He can be reached at letters@wildcat.arizona.edu.
