Democratic Party Chair, Debbie Wasserman Schultz famously stated last May that “We own the economy. We own the beginning of the turnaround and we want to make sure that we continue that pace of recovery, not go back to the policies of the past under the Bush administration that put us in the ditch in the first place.” Well, the first part of that was true. They own the economy! And they have since America foolishly entrusted Congress to the leadership of Nancy Pelosi and Harry Reid back in 2006.
We’ll discuss the remainder of Wasserman Schulz’ statement in a moment… but first let’s establish a little historical background.
George Bush took office in January 2001 with a National Debt of 4 Trillion Dollars. The economy was riding the bubbles of the tech explosion and the easy money in the housing market. Less than a year later, we experienced the dot-com bust and the attacks of 9-11. Remember that 9-11 was a direct assault on our economy – the attack was directed at the World Trade Center… both a symbolic and a de-facto heart of our world commerce. We naturally tend to focus on the loss of life and property, and well we should. But the economic impact of that attack was enormous as well.
So we went to war.
How many times have you heard how military spending and Bush’s wars have bankrupted us? Undoubtedly so many you can’t put a number to it. But let’s examine the facts.
Remember the 87 billion dollars that John Kerry balked about… voting for it before voting against it back in 2004? That was to fund those two wars for a year! Is 87 billion dollars a lot of money? Heck yes! But we spent less on both wars in a decade than Obama’s stimulus cost us in one year. So a little perspective, please!
But I digress.
The economy took a hit after 9/11, and our deficit climbed. By 2003 it had soared to 420 billion dollars. While a deficit that size would be a major blessing today, at the time it was historically large. So what did George Bush do? Tax cuts.
And the left went nuts. But the tax cuts did what tax cuts always do; revenues increased. The deficit fell each of the following 3 years until, in 2006; the deficit was reduced from a high of 450 billion in 2003 by more than 2/3 to 120 billion.
In 2004, Congressional Republicans began hearings on Fannie Mae and Freddie Mac and started waving red flags about the sub-prime mortgage threat. They were demanding MORE oversight and regulation of these entities and warned of the dangers of forcing lending institutions to make home loans to people who can’t afford them.
Who came to the defense of Fannie and Freddie, claiming there were no problems and there’s “nothing to see here?” Chris Dodd, Barney Frank, Maxine Waters etc.
The Democrats created the problem with Carter and the Community Reinvestment Act of 1977. Under guise of “encouraging” lending institutions to “meet the needs” of home borrowers in “moderate income areas”… this act empowered ACORN and other community organizing groups to pressure banks into making ill advised loans to people who simply would never be able to repay them. You may wish to read about the act here.
All sorts of new lending vehicles were created. Interest only loans? How is that different from rent? One never gains any equity. Balloon notes? Get people into the house with an affordable payment, only to watch it skyrocket out of sight in a few years?
The Community Reinvestment Act was revisited by Clinton and even more regulations were placed on the banks. The bubble was expanding faster now, and would soon burst.
Then we handed the reins of Congress, and the purse-strings, to Pelosi and Reid. Bush had two years of his term remaining. And yes, we were driven into the ditch during those two years. But it wasn’t Bush that was driving… it was Pelosi and Reid!
In their first year, they tripled the deficit to 450 billion… 30 billion more than Bush’s worst deficit with a GOP Congress. And in their second year they tripled that to 1.3 Trillion dollars. (More than 10 times the 2006 deficit!) They added 3 trillion to the debt in just 2 years, so Bush left office with a 9 trillion dollar debt.
Bush had added 2 trillion with a GOP Congress in his first 6 years. And 3 trillion more (a 50% increase in debt) in his last 2 years under the Pelosi/Reid 110th Congress. In 2006 all of government spending was right around 2 trillion dollars. Pelosi/Reid swelled the budget to 3.5 trillion in their 4 years.
Barack Obama took office, and the Democrat triumvirate of Obama/Pelosi/Reid went on a spending spree. The debt increased by another $5 trillion in 2 years. Under a GOP presidency with a GOP Congress, after 5 years of war, our debt was $6 trillion. After 4 years of Pelosi-Reid, it is over $14 Trillion… and $5 trillion of that added in Obama’s first 2 years. Remember that it took 230 years and 42 presidents to bring our debt to $5 trillion. And the democrat triumvirate managed to raise our debt by 5 trillion in 2 years. Interest payments on the debt have more than doubled in four years.
Yes. Democrats own the economy.
And the downgrade?
Consider a family with a household income of $21,700 a year. They have been spending $38,200 a year and added $16,500 to their credit card balances in the last year. Their cards are at limit. They are $142,710 in debt on their cards. They sat down to make a budget, and managed to find $385 in cuts they could live with.
You’re the bank. Do you give them another loan?
Add eight zeros to each of the numbers above. That’s our federal government.
But what about the remainder of Wasserman Schultz’ comments:
“We own the beginning of the turnaround and we want to make sure that we continue that pace of recovery…”
Yeah, what about that?