PRNewswire-USNewswire/ — Today the Committee for a Responsible Federal Budget commented on the White House’s $700 billion plan to try to stabilize financial markets.
«This is exactly why we need to practice responsible budgeting,» said Maya MacGuineas, President of the Committee for a Responsible Federal Budget. «We are now in a predicament where it is critical that the government has the tools necessary to help stabilize the economy, but the nation’s credit card simply does have the room for this kind of spending.»
«I don’t see how you can charge $700 billion to the credit card when you already have $500 billion in unpaid bills and a $10 trillion mortgage,» MacGuineas continued, referring the expected 2009 deficit and the national debt, respectively.
The ultimate fiscal implications of the plan are still uncertain. The mortgage assets will be worth something when they are eventually sold by the government. It also is unclear how the expenditures will be budgeted. Regardless, the plan will require substantial short-term borrowing which will likely impact interest and exchange rates.
«This is going to have profound effects on the economy. It also leaves little room for the many promises that two leading candidates for president are making,» MacGuineas warned. «This is a very expensive wake-up call that we have to get our fiscal house in order,» said MacGuineas.
About The Committee for a Responsible Federal Budget
The Committee for a Responsible Federal Budget is a bipartisan, non-profit organization committed to educating the public about issues that have significant fiscal policy impact. The committee is made up of some of the most important budget experts in the country including many of the past chairmen of the House and Senate Budget Committees, directors of the Congressional Budget Office and the Office of Management and Budget, and members of the Federal Reserve Board. For more information about the Committee for a Responsible Federal Budget, visit www.crfb.org.
Source: Committee for a Responsible Federal Budget