Record Debt Reducing GDP, Costing As Many As 1 Million U.S. Jobs
Washington, DC – With understandably little fanfare and late on Friday night during a Congressional recess, the U.S. Treasury Department met its legal obligation to issue its “Annual Report on Public Debt.” The document, which came out on the same day the Labor Department reported virtually no private sector jobs were created last month, contained more bad news for the American people –as the national debt will soar to record levels. Citing recent expert testimony, Ways and Means Ranking Member Dave Camp (R-MI) noted the national debt will be so large this year that it will impede job creation.
“The President’s economic experts say a 1 percent increase in GDP can create almost one million jobs, and that 1 percent is what experts think we are losing because of the debt’s massive drag on our economy,” said Camp. “The failure of this Congress to even produce a budget, let alone get spending under control, is doing direct harm to our economy. Washington must start paying for its spending with something other than more debt and more lost jobs.”
On page 8 of the report, the Administration estimates the total debt for Fiscal Year 2010 will reach $13.6 trillion, or 93.1 percent of Gross Domestic Product (GDP). University of Maryland Professor Carmen Reinhart, who is also a member of both the National Bureau of Economic Research and Center for Economic Policy Research, recently warned the National Commission on Fiscal Responsibility that debt loads above 90 percent of GDP result in a reduction in economic growth of one percentage point. According to the Administration’s Romer-Bernstein economic model, a one percent increase in GDP could create 979,000 jobs.
“The debt is preventing us from creating the jobs America needs,” said Camp. “This report is yet another warning that Congress cannot continue to pass unpaid-for spending without further hurting our recovery.”
A Gallup poll released Friday showed that Americans are keenly aware of the harm the debt is causing. A total of 79% of Americans now view the federal debt as a serious threat to the “future well being” of the country – an identical number to those viewing terrorism as a serious threat.