Letters to the Editor 4/22 Part 2

April 20, 2001

Letters to the Editor 4/22 Part 2

Democrats come late to the idea of debt reduction

The Democrats have suddenly developed a passion for national debt reduction now that President Bush has proposed an across-the-board tax cut. They argue that somehow it is immoral not to pay it off as quickly as possible lest it become a threat to the republic's existence and an unbearable burden on our children. It's about time the facts about the how and why of the national debt are explained and the myths about its costs and consequences dispelled.

The national debt is the sum of all of the unpaid obligations against the Treasury of the United States over the years. Its cause is the same as any private debt - more money being spent than coming in to pay for the goods and services the government has bought. Every year if that occurs, we have a budget deficit. The sum of all those annual deficits is the national debt.


Fact one, then, is that the national debt is the result of too much spending and too little revenues coming in from federal taxes, licenses, fees, fines, sales of assets, etc.

Why have we so often overspent out annual budgets? Mostly it was for very good reasons. We fought wars to save our freedom, to advance democracy in the world, and to protect our friends from aggression for almost half a century. We took actions to shield our citizens from the effects of poverty, sickness, old age and similar things. We provided our people with all kinds of beneficial services they have demanded. The costs of all of these actions were more than past and current generations were willing to pay out of pocket so we borrowed money by selling government securities to raise the extra funds needed.

Fact two is that most of the national debt is very properly shared with future generations who now benefit and will continue to benefit from the investments we have made. Its outrageous to claim that our children will be unfairly burdened by the above actions.

Our national debt is over $6 trillion. Who do we owe the money to? Over two thirds of the national debt is owed to American individuals and businesses who hold the bonds of the United States.

Fact three is that the national debt is, in large part, owed by Americans to Americans. It's mostly in the family.

Is there a threat of foreclosure by anyone holding U.S. Government securities? In other words, can anyone holding our bonds demand immediate payment and throw our country into bankruptcy? The answer is "NO". Out national debt is not like a private debt that has certain payoff date. Economists refer to our government debt as "immortal"

Bonds of all denominations and terms previously sold to buyers reach maturity every day are redeemed. Where do we get the money to pay off the matured bonds? We issue new bonds with future maturates. But, as is the case with any borrowing, there is a cost - interest.

The Democrats argue that there is a so called "opportunity cost" or the amount of interest we could save if we used the budget surplus to pay off debt instead of giving the surplus back to we citizens as a tax cut.

This is true but there is another indisputable fact. A dollar spent paying off the debt does little to increase spending power in the hands of consumers. When an economy is faltering, the only alternative to more government spending is to increase personal consumption to boost production, jobs and personal incomes. A tax cut will help to do this.

A big myth the Democrats are trying to sell is that our national debt is a burden so onerous that it threatens the very roots of our economy. The final fact is that there is no particular virtue nor good reason to rush to pay off our national debt and there may even be a downside far greater than the interests saved. For all of us, and that includes later generations to come, the future is now!

Donald Currier is a Smithsburg area columnist who writes for The Herald-Mail.

First Amendment under siege

To the editor:

Rep. Dick Gephardt, a McCain-Feingold supporter, told Time magazine in 1997 that "What we have is two important values in direct conflict: freedom of speech and our desire for healthy campaigns ... you can't have both."

Obviously, Mr. Gephardt considers a "healthy campaign" to be one where federal bureaucrats and judges decide what information the voters will be allowed to hear or read. Think about it. Shouldn't the voters or organizations they affiliate with be free to support financially the candidates of their choice? Are we free men or not? Besides limiting the so-called "soft money," McCain-Feingold would ban independent information campaigns.

For example, the "report cards" which various organizations put out on candidates would be banned during the campaign season. Whatever happened to the First Amendment? Indeed, it would only be the likes of Ted Turner and the other media giants who would decide what you would hear about the candidates (and, of course, ole Ted isn't biased at all, is he?)

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