"The most important factual reason that the gentleman from South Carolina's (Mr. Spratt) budget benefits and strengthens families in our country is it operates on the principle that American families operate under, which is you can't live on borrowed money forever. You can't run your credit card up forever and hope that you win the lottery someday to get yourself out of that mess. The gentleman from South Carolina's (Mr. Spratt) budget, just as American families do across this country, recognizes the reality that you have to make choices."
-- Congressman Rob Andrews
I am opposed to running our government on borrowed money. The federal government is on course to spend $396 billion more than it takes in in the fiscal year that will end on September 30, 2008. When the federal government begins deficit spending, investors in the financial markets draw three conclusions. First, there will be less capital for business and job expansion in the dynamic private sector. Second, demand for capital will be greater, so the price of capital (interest rates) will go up. Finally, less money will be available for Social Security, since the government is covering this deficit in large part by borrowing from the Social Security Trust Fund. This likely means massive federal borrowing over the next few decades, exacerbating the problems of capital scarcity and high long-term interest rates. All of this means fewer jobs, lower earnings, falling stock prices, and shakier pensions.
We must end corporate welfare and start balancing the country's checkbook so that we can begin to reduce the Country's deficit spending which will provide more money in the lending markets by boosting investors confidence. That, in turn, will promote economic growth in all sectors of our economy, which financially benefits the government, business and consumers.