Is our Country Broke?
by Gary Therkildsen*, 2/16/2011
At a news conference yesterday morning, House Speaker John Boehner (R-OH), shrugged off criticism that his party's proposed spending cuts would cost thousands of federal workers their jobs, saying, "In the last two years, under President Obama, the federal government has added 200,000 new federal jobs. If some of those jobs are lost, so be it. We're broke." Boehner has rightly been criticized for the first and second parts of his comments, but what about the last part?
Writing in his Beat the Press blog, economist Dean Baker over at the Center for Economic and Policy Research (CEPR) teases that idea out this afternoon. Recognizing that not only Boehner but also the entire GOP leadership has been repeating this claim lately, Baker observes:
Of course this is not true. Investors are willing to lend the United States trillions of dollars at historically low interest rates. This means that the government is not broke. There is no evidence that it is coming up against any serious spending or borrowing limitation.
Quite right. It's legitimate for public officials to want to debate the costs of incurring more debt down the road, as interest payments on very high levels of debt would begin to crowd out other spending, but we're nowhere near that point. To simply say that we're broke as a country is just flat out wrong.
But, it's interesting to imagine how the Speaker would defend his statement. My guess is that he would point to the amount of debt we currently hold. He would still be wrong, of course, but this raises a question: is there something special about being in debt $14 trillion as opposed to being $6 trillion or $10 trillion in debt? Because those last two figures are the amount of debt we held at the beginning and end of the Bush administration, respectively.
Yet, at no point did I ever hear the current speaker utter one word between those years about our country being broke. That makes me wonder if Boehner and the GOP are just screaming about the nation being broke in order to scare the American people into going along with their proposals to drastically cut the federal budget and eviscerate entitlements like Medicare and Social Security.
Image by Flickr user House GOP Leader used under a Creative Commons license.