Apropos of nothing, I’d like to pass along a terrific, albeit old, op-ed on the dangers of huge budget deficits. You might find the writer of the piece amusing.
A link is no longer available, but the op-ed appeared in the Richmond Times Dispatch on Nov. 13, 1995. It insisted, in strong terms, that a lower deficit would have a positive impact on the lives of every American, while large deficits threaten our economic future.
A balanced federal budget is the best choice to ensure a bright future for the nation’s economy, American workers, consumers and taxpayers — and most of all, for future generations.
A credible, sustained reduction in federal deficits, leading to a balanced budget, will bring major economic benefits. As the government spends less and borrows less from investors to cover declining deficits, more capital will be available for investment in the private sector of the economy. Inflationary pressure will ease and interest rates will respond by declining as much as 2 percentage points. Each of us will have more of our hard-earned money to spend or save as we choose.
That’s not speculation or wishful thinking. It’s the consensus of a wide range of respected economists and financial market analysts, including Federal Reserve Chairman Alan Greenspan.
This op-ed went on to explain the innumerable benefits to small, or better yet, nonexistent, deficits. More capital for business investment, increases in “spendable income and lower costs for their most significant purchases for consumers,” and perhaps most importantly, the long-term health of entitlement programs.
For our children and grandchildren, [lower budget deficits] will mean that entitlement programs such as Social Security, Medicare, and Medicaid will still be there to aid them in times of need or once they retire.
Who wrote this Democratic Party propaganda that is so obviously at odds with the Bush agenda? It was John Snow, then CEO of CSX Corp. and now Bush’s Treasury Secretary.
Yes, in 1995, when Snow wrote this op-ed, the deficit was $164 billion (2.2% of GDP) and shrinking. That same year, Snow said the deficit was “the most pressing issue facing the country” and “threatens the very foundation of our culture.”
Now, of course, the deficit is well over $400 billion (about 3.5% of GDP) — and John Snow believes we should make it considerably worse.
President Bush’s plan to partially privatize Social Security probably won’t raise interest rates or adversely impact financial markets, even if the program entails borrowing hundreds of billions of dollars to finance it, Treasury Secretary John W. Snow said yesterday.
With this in mind, I’d like to nominate John Snow for the flip-flop Hall of Fame. He’s clearly earned it. A $164 billion deficit, in Snow’s mind, was about to destroy America and threaten the health of Social Security, but a $400 billion deficit is perfectly manageable and should be made worse in order to save Social Security.
What an embarrassment.