An honest look at the deficit drivers

How about those federal deficits! Terrible, aren’t they? Yes, indeed, but here are some thoughts on why the nation is going into the red at such a fearsome rate.
In its “Voices of Power” series, a Washington Post reporter interviewed Dr. Austan Goolsbee, the chief economist for the President’s Economic Advisory Board. He made these points:
— The reason that the 10-year deficit is getting bigger ... is first and foremost because the economy has gotten substantially worse, and as the current economy gets worse, it makes the 10-year deficit numbers significantly worse also. And that’s by far the biggest thing driving it. The recession has greatly reduced government income because personal and business income tax collections have fallen sharply, pushing the deficit higher.
— “The second factor is the president consciously came in and said, ‘We’re going to stop engaging in a series of budget gimmicks that are used to artificially make the 10-year deficit look smaller,’ so things like, they put in zero dollars for natural disaster costs each year, even though there’s a hurricane season every year. So you would think that this is a somewhat regular expense.
“Each year, they say, ‘Oh, my goodness. How could we have predicted there would be a hurricane hitting South Carolina this year?’ And so the president said, ‘Look, let’s take the average cost for natural disasters. Let’s put it in the budget every year.’
“Let’s stop saying the research and development tax credit is only temporary. Let’s make it permanent because they renew it every year. Let’s stop saying we’re going to cut all doctors’ salaries by 20 percent at the end of the year and then, at the end of the year, saying actually we’re not going to do it this year, but we promise to do it in all future years, thereby keeping the long-run deficit smaller.
“None of those are spending. The president is not spending anything that people were not spending before for all of those budget gimmicks. He is instead saying, ‘Let’s be honest about the situation we’re in,’ and so I would just encourage people who are agitated about the spending to do two things.
“The first is go look at the 10-year budget and ask how much of the increase in the 10-year deficit is actually due to new programs versus just being honest and just recognizing the state of the economy.
“The second is, for this year and next year, while we’re in stimulus and Recovery Act land, in the face of the stiffest recession since 1929, that is not when you try to tighten the belt. It is extremely dangerous to do that. That is exactly what Herbert Hoover did that got us into the Depression.”

IT WOULD BE refreshing if Republican leaders would agree with Dr. Goolsbee’s observations, which are factual, not ideological or partisan, and say that it is a good idea to recognize these factors; that the recession is reducing federal income and driving up the deficit; that doing a more realistic job of budgeting would deal in a more straightforward way with the American people; and it really is possible for Republicans as well as Democrats to work together in dealing with the most significant threat to the American economy almost every member of Congress has ever seen.
Join with me in dreaming an impossible dream.

— Emerson Lynn, jr.