PRESS RELEASE from Iowa Democratic Party

July 20, 2011 from Megan Jacobs

Fact Check: Michele Bachmann's "Courage"

Despite warnings from nearly every economist in the country, Michele Bachmann is doubling down on her wrong and dangerous rhetoric.  Just last week the Des Moines Register reported economists calling her claims on the debt limit "flat wrong."

Bachmann’s latest ad about opposing a debt limit increase shouldn’t be called ‘Courage’ it should be called ‘Dangerous.’  Failure to raise the debt limit would be catastrophic for our economy and would likely send us into a tailspin worse than the last.  If Michele Bachmann isn’t willing to put the best interest of the country ahead of partisan politics on a critical issue like this, she isn’t ready to be President.

FAILURE TO RAISE THE DEBT CEILING WOULD HAVE DISASTROUS EFFECTS ON OUR ECONOMY AND MIDDLE CLASS FAMILIES
 
Defaulting On Our Obligations Would Mean Immediate Cuts To Social Security. “The Bipartisan Policy Center studied Treasury Department receipts and expenditures for August 2009 and 2010 and determined that the government likely would not have enough revenue to pay the full $23 billion payment to Social Security recipients due on Aug. 3 [if no agreement on the debt ceiling is reached.] On that day, according to the analysis, the government would take in about $12 billion in taxes and other revenue but would owe $32 billion, creating a $20 billion shortfall.” [USA Today, 6/29/11]
 
Mark Zandi: Failure To Increase The Debt Ceiling Would Lead To Significant Spending Cuts And A Recession. ’If we get to August 2 and there is no debt ceiling limit, and there has to be significant spending cuts – even if Congress and the administration reverse themselves days later, I think the damage will have been serious, and we probably would be thrown into a recession,’’ [Moody’s Analytics chief economist Mark] Zandi said.” [Christian Science Monitor, 6/28/11]
 
Defaulting On Our Obligations Could Result In “The Largest Quarterly Economic Decline Since 1947.” The Center for American Progress reported that “a two-month failure to raise the debt limit could result in the largest quarterly economic decline since 1947, when relevant data were first reported. That would obviously be a bigger decline than in any quarter of the Great Recession. And the worst quarter of the Great Recession saw a loss of nearly 2 million jobs.” [Center for American Progress, 7/7/11]