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In Debt We Trust

By City Weekly Readers
Posted // December 19,2012 -

In response to Chad Allen’s Staff Box answer, “We don’t have a revenue problem” [Dec. 6, City Weekly], Chad and others are wrong. Here is why:

Ronald Reagan inherited $1 trillion in debt in 1981. The debt was the balance due on a depression and three wars over the prior 50 years. To stimulate the economy, taxes were cut 25 percent: 5 percent in Year 1, 10 percent in Year 2, and 10 percent in Year 3, even though by then, the economy had largely recovered.

Supply-side economists convinced Reagan and Congress that deficits don’t matter. Both parties—but mostly Republicans—played a role. Even some right-wing commentators like George Will questioned the deficit spending. George Will commented in the mid-1980s that government spending was about 23 percent of GDP and revenues were only 19 percent of GDP, 4 percent short. No one listened.

By the end of the Bush I presidency in 1992, the debt had risen to $4 trillion. The Clinton years were a balance, only $300 billion to the good, but no addition to the debt.

Bush II inherited the $4 trillion debt left by his father. Bush II quickly passed a tax cut expiring Dec. 31, 2012, then Sept. 11, 2001 happened and we went to war, then a second tax cut was passed. Bush II left office with the U.S. debt at $12 trillion, the country in a financial ditch, with the debt rising to $20 trillion or more no matter who was elected president in 2008 or 2012.

No, Chad, there is a revenue shortfall that started 30 years ago. We need to reduce spending to help restore a balance but not to the ridiculous level that fails to provide food inspection and such. We want to be safe.

The very groups that were saying deficits don’t matter are now shouting that deficits do matter when spent on a social safety net—but not when spent on war. Apparently, spending money to help someone out of a ditch hurts the economy but shooting them helps the economy.

JERRY CROUCH
Salt Lake City

 
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