U.S. Sen. Judd Gregg told CNN’s Lou Dobbs Wednesday night that the United States would be turned into a “banana republic” by the Obama administration’s budget plan.
President Barack Obama’s budget, Gregg explained, “puts on the books a massive amount of debt. It doubles our national debt in five years, triples it in 10 years. And as far as the eye can see, essentially, it is running deficits of over $1 trillion a year.
“And you just can't afford that,” said Gregg, R-N.H, who was Obama’s choice for secretary of commerce before he withdrew his name over what he described as philosophical differences. “We get up to -- it's a technical term, but we get up to a public debt ratio to GDP of 80 percent, which is about twice what most people think is sustainable. And if we maintain that level, which is projected in the president's budget, you basically -- you're running a banana republic is what it comes down to. You can't afford to pay those debts.”
Gregg also explained that, in addition to a fiscal document, the budget plan was very much an ideological blueprint that takes the country far to the left. Unlike President Bill Clinton, who raised taxes to help pay off the deficit, the Obama administration will use tax revenues to dramatically increase the size of the federal bureaucracy in areas like healthcare and environmental programs.
“And it grows it so fast that it basically outpaces our ability to pay for it, in my opinion. Gregg continued. “And that's why we've got this looming issue, which is going to be very difficult for our children to deal with, which is they're going to have a debt that far exceeds their capacity to pay it.
Gregg acknowledged that Obama’s plan could in theory cut the deficit in half by the end of his term in 2012. But he pointed out that those estimates are based on extremely rosy scenarios that suppose a lofty rate of growth that hasn’t been seen in the United States in decades.
“But even if he is right, even if they hit those numbers, they're still going to be running deficits, according to the CBO, that will range in the trillion-dollar range,” Gregg said. “I mean, you just can't -- the reason you can't close this down is because he's expanding the size of the government so quickly, the spending of the government so quickly.”
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