By Paul E. Tix, Guest Columnist
Kudos to Tom West for his excellent editorial in the June 17 issue of the Peach. The headline caught my attention and I agree. “U.S. is imperiled by lack of economic education.”
If I were to put a headline on this letter it might well read “U.S. is imperiled by lack of economic discipline.” Instead of facing the cold hard facts of debt reduction we get foolish political talk.
Earlier in history when the debt was mostly held by private citizens, we would hear how “the debt doesn’t much matter because we owe it to ourselves.”
Well, private citizens expect to be repaid, too. Now that so much is owed to China, we don’t owe it to ourselves.
When I discussed the debt with a Bush advocate during the last administration, I got, “the debt is a lot easier to repay than most people think.” When I asked, “How?” I got silence.
Democrats have been dubbed as “Tax and Spend” and this is probably accurate. But then the Republicans should be dubbed “Borrow and Spend” because this is exactly what they did through the last three Republican presidencies, as the record will show.
You can tax and spend (though painful) and stay out of debt if tax collections (income) exceed spending.
Borrowing and spending will surely incur debt. When the debt is increased by spending from borrowing, then someone, somewhere in our society got more benefits than they earned. (Tax breaks for the rich, etc.) No politician (and I’m not one) will ever admit that to retire debt the reverse is true. Someone (mostly voters) will get less than they earn because the government uses the difference to pay off debt. No voter wants to hear that.
I’m going to add to the historical facts from West’s editorial, some facts from the record in “Economic Report of the President: 2008” though any year’s report will do. Ronald Reagan took the national debt above the trillion-dollar mark early in his presidency.
With the help of his successor, George H.W. Bush, debt had quadrupled to $4 trillion by the end of the Bush presidency.
West was right when he related that Reagan had a golden opportunity to retire debt and threw it away. That is just dumb.
The Clinton presidency lasted eight years, and we saw a rare, leveling off of debt and even a start of debt retirement. (Paying off debt is not as painful during good economic times).
Then along comes eight years of George W. Bush, who managed to essentially double an already huge debt with spending on “the war that would pay for itself” and similar lies and foolish economic decisions.
Remember “the economy is basically sound”? Maybe for a Texas oil-rich politician. The Republicans owned the national debt until Obama got elected.
Obama has been borrowing and spending as if he were a good Republican with no end in sight. Meanwhile, he plans to increase revenue by extracting money from Medicare and Social Security, as if old folks don’t already have enough financial problems.
Maybe the Republicans can give us a moderate president who can work with reasonable Democrats. With John Boehner and Chris Christie available, we can hope.
Paul E. Tix is professor emeritus of economics at Minnesota State University, Mankato. He lives in Avon.