Boehner Builds Economic Case on Assertions at Odds With Markets, Studies

[Modbert]

Boehner Builds Economic Case on Assertions at Odds With Markets, Studies - Bloomberg

Boehner said in his May 9 speech to the Economic Club of New York that government borrowing was crowding out private investment, the 2009 economic-stimulus package hurt job creation, and a Republican plan to privatize Medicare will give future recipients the “same kinds of options” lawmakers have.

Boehner’s statement in his Wall Street speech that government spending “is crowding out private investment and threatening the availability of capital” runs counter to the behavior of credit markets.

“Look at interest rates. Look at capital spending,” said Nariman Behravesh, chief economist of IHS Inc., a research firm based in Englewood, Colorado. “It’s very hard to come to a conclusion that there’s any kind of crowding out.”

The cost of borrowing is low by historical standards. Yields on 10-year Treasury notes were 3.21 percent and yields on 2-year Treasury notes were 0.59 percent at 5 p.m. in New York yesterday, according to Bloomberg Data. Average spreads on investment-grade corporate bonds have narrowed from 1.64 a year ago to 1.39 on May 9, according to Barclays Capital.

Boehner, 61, an Ohio Republican, also said the 2009 stimulus program “hampered job creation in our country,” a view at odds with the Congressional Budget Office’s findings last August. The stimulus package increased the number of people employed by between 1.4 million and 3.3 million and cut unemployment by between 0.7 percentage point and 1.8 percentage point, according to CBO.

The speaker also repeated an assertion made by House Republicans that their plan to privatize Medicare will give future recipients “the same kinds of options that members of Congress currently have.”

The CBO projected in an April 5 report that under the Republican plan, by 2030 the government would pay 32 percent of the health-care costs of a typical 65-year-old. The U.S. Office of Personnel Management’s benefit handbook says the government pays as much as 75 percent of the health-care costs of federal workers, including members of Congress.

“Facts are stubborn things; and whatever may be our wishes, our inclinations, or the dictates of our passions, they cannot alter the state of the facts and evidence”
-- John Adams

 

[Old Rocks]

But when, in the last 30 years, have the GOP leaders ever been in contact with reality?