ROANOKE TIMES
Copyright (c) 1995, Roanoke Times
DATE: Saturday, December 30, 1995 TAG: 9601020009
SECTION: EDITORIAL PAGE: A-9 EDITION: METRO
SOURCE: CARROLL SMITH
PAUL VARSON (Dec. 15 letter, "Clinton's Medicare scare tactics") and others who have been commenting on the current circus in Washington endorse the Republican mythology which seems to be repeated to the point of nausea by every right-winger in the Congress. That is, we are increasing spending and only slowing the growth in social spending. We are not cutting.
Surely, anyone who is capable of getting into that rarified realm beyond the Potomac must know about inflation and its effects. They know that money does not have a fixed or absolute value. So, who are the marks in this con game? It must be us.
Anyone who has worked for the past 20 years or so has seen his or her income increase substantially over the period. They also have seen prices increase more rapidly. If your income goes up by "X" amount and bread goes up by "2X", you cannot buy as much bread as before. In fact, this is precisely what has been happening to the average American, whose real income has been declining at a rate of about 1 percent per year for the past several years. The final outcome of the Republican plan will be an increase in dollars and a cut in services.
Second, the one place where Republicans are eager to use the word "cut" is when they are talking about taxes. Newt Gingrich called the tax cut the "crown jewel" of his Contract with America. Yet the GOP plan projects that federal revenues will grow from a little less than $1 trillion this year to about $1.3 trillion in the year 2002. Where is this extra money to come from? From the taxpayers, of course. Therefore, the recipients of this "tax cut" will be paying more taxes in the future than they pay now.
It would seem candid if they said that they are not cutting taxes, but only slowing the rate of growth in taxes. I would guess the reason for not doing so is that "preserving and protecting Medicare" and "tax cuts" sound better than an honest analysis.
Third, the Republicans' "balanced" budget by 2002 is not really balanced. Although not much is said about it, they project a shortfall of about $110 billion at that time. This is covered up by borrowing from Social Security and other trust funds.
The argument is that this is really federal money and can be counted on the plus side of the ledger. Never mind that it is represented by treasury bonds that must be redeemed out of general revenues if the money is ever to be used. It is only in the world of arcane government accounting that a liability can be so magically converted into an asset. This system has been going on for years and has been used to mask the true size of the deficit. Doubtless, the reason the Clinton administration does not make an issue of this point is that it wants to use the same gimmick itself.
Also, do we use Office of Management and Budget projections as the White house wants to do or Congressional Budget Office numbers as the congressional majority wants to do? Newt and his cohorts have recently taken to calling the latter "real numbers," in contrast to the president's figures which must be unreal in some fashion.
Actually, it is almost certain that both projections are wrong. Economic forecasts of the condition of the economy seven years in the future are no better than the Old Farmers Almanac's weather forecasts. In fact, if I were a betting sort of person, I would put my money on the almanac. Predicting snow storms in January and thunderstorms in July have a decided advantage over anything that econometric models can do over the same period.
Moreover, do the deficit and the national debt really make all of that much difference? At the end of World War II, my parents and grandparents had run up a national debt that was about twice the size of the annual gross domestic product. Did we suffer to pay it off as we are now being told that our children and grandchildren are going to do?
The rebuilding of war-devastated Europe and Japan provided the means for economic growth in the United States. These same areas are now part of the problem and not a solution. Realistically dealing with the current problems seems to be something that cannot be discussed in Washington. If any legislator knows of some way to solve this mess, he will likely be quiet about it because the powerful interests that finance campaigns are not going to like it.
Finally, Congress cannot legislate budgets for more than one year at a time. There are four more congressional elections before the year 2002. Do you suppose that these future legislators and administrators are going to look upon whatever is done this year as holy writ? Will they not adjust, tinker and otherwise alter all of these budget items in ways that we cannot predict?
One need only recall the famous Gramm-Rudman law that was supposed to force the Congress to avoid deficit spending. It did not work, and I would bet that whatever comes out of all of this caterwauling in D.C. will work no better. Rather than workable solutions to problems we are subjected to blarney, blather, balderdash, bafflegab, baloney and B.S.
Beam me up, Scotty! I have been in this madhouse too long.
Carroll Smith of Shawsville is a retired Radford University psychology professor.
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