Deficits Threaten Economy

July 28, 2016 at 4:25 p.m.

By GARY GERARD, Times-Union Managing Editor-

An important deadline passed on April 15.

No, not the Internal Revenue Service deadline for us to give them money. There was a deadline in Washington. And, as it has 24 out of the last 30 years, Congress missed it.

It was the deadline for the U.S. House of Representatives and U.S. Senate to pass a joint budget resolution.

You know, that kind of annoys me. I work in a deadline business, so I am really in tune with the concept of a deadline. If I missed my deadline 24 out of 30 times, I'd be in big trouble.

And if taxpayers miss deadlines, they're in big trouble. Why doesn't Congress ever get in trouble? Seems they can just bumble along any old way they please. Oh, I know the voters have the final say. If members of Congress screw up, they can be voted out of office.

Of course, we all know how that works. Incumbents have all the perks. They have all the special interest money. They have the most ads on TV They keep winning. They're really good at getting re-elected and staying in power.

So basically, congressmen are like weathermen.

Like Thursday. I had an interview in Plymouth at 12:30 p.m. It was chilly in the morning, but I looked at the weather on the Internet. I looked at three different sites. The Weather Channel, Weather Underground and NOAA. All three said it would be sunny and 63 degrees around noon.

OK, I can ride the motorcycle to work. It will be a little chilly in the morning, but by noon, it'll be a pleasant ride to Plymouth and back in the afternoon.

At 12:30 p.m. it was 46 degrees and cloudy. Another chilly ride I could have easily avoided if only the weathermen knew what they were talking about.

Did those weather forecasters get held accountable in any way? Anybody get fired? Anybody get reprimanded. Nope.

Just like congressmen, they can screw up ad infinitum and we all just put up with it.

And this budget thing is really annoying.

Just this week Federal Reserve Board Chairman Alan Greenspan had some interesting things to say to Congress. Trouble is, it probably fell on deaf ears.

Greenspan, who is Washington's top economic expert, told Congress that rising budget deficits will cause the economy to "stagnate or worse."

But Congress doesn't really care.

Worse than the fact that they missed the joint resolution is the fact that they probably will fail to pass any budget at all. If that happens, lawmakers don't have any spending guidelines.

So then the 13 spending bills that fund the government get passed piece by piece. Whatever gets left out, and that's a whole bunch, generally, gets piled into one gigantic entity known as an omnibus appropriations bill.

That is precisely what has happened in each of the last three years with the Republicans firmly in control of Congress. This is not a good thing.

See, what happens is the omnibus bill swells. All the congressmen see it as pretty easy to add stuff in there. The larded-up monstrosity generally passes before anybody has a chance to read the whole thing.

The process is only partially to blame for the deficit problem. All the pork barrel spending our venerable leaders could imagine wouldn't run up the record $377 billion deficit of two years ago. Or the new record $412 billion deficit last year. Or the projected new record $427 billion deficit for this year.

There's plenty of blame to pass around when it comes to deficits, but mainly, Congress likes to spend and W hasn't done anything to rein it in. Not one veto. Far from it. W supported huge increases in farm subsidies and expensive new government programs.

The war in Iraq has been costly, to be sure, but the biggest increases have been in discretionary domestic spending.

Bottom line?

Last year the U.S. government spent $322 billion of your money on interest payments to the holders of the national debt. By comparison, the Department of Transportation got $56 billion. Education got $61 billion.

This can't go on.

It threatens more than the economy, as Greenspan notes. It threatens the stability of the U.S. dollar. Right now, the dollar is the international trade standard.

But listen to the recent comments of Malaysian Prime Minister Mahathir Mohamad. (This guy also served as Malaysian finance minister, so one can assume he knows a little about these things.)

He said the U.S. budget deficits are forcing the U.S. dollar toward "imminent collapse" and the global economy will suffer a "catastrophe" when the dollar is rejected as the currency for trade.

He spoke at a conference of 650 chief execs from 30 countries in Kota Knabalu on the island of Borneo March 29.

He said the dollar was retaining some value because of fears of a global economic catastrophe if it was rejected.

The Star newspaper offered this quote: "But the catastrophe will come one day because even the most powerful country in the world cannot repay loans amounting to seven trillion dollars."

Mahathir said he believes central banks worldwide were reducing their U.S. dollar reserves and he suspected that Malaysia was also switching to other currencies. Telling reporters that he was giving his personal views, he warned, "Unless (the Americans) ... have a more responsible president who will try to reduce the deficit, they will have serious trouble with the US currency."

Our lawmakers need to get serious about this. They need to adopt policies to address the deficit - yesterday.

They need to set some realistic and achievable spending and revenue targets. But you know what? They're not even talking about it. It's not even on their radar.

When the weatherman screws up, the consequences are annoying - a chilly motorcycle ride, a wet picnic.

If our esteemed leaders in Washington keep screwing up the deficit problem, I assure you, the consequences will be far beyond an annoyance. [[In-content Ad]]

An important deadline passed on April 15.

No, not the Internal Revenue Service deadline for us to give them money. There was a deadline in Washington. And, as it has 24 out of the last 30 years, Congress missed it.

It was the deadline for the U.S. House of Representatives and U.S. Senate to pass a joint budget resolution.

You know, that kind of annoys me. I work in a deadline business, so I am really in tune with the concept of a deadline. If I missed my deadline 24 out of 30 times, I'd be in big trouble.

And if taxpayers miss deadlines, they're in big trouble. Why doesn't Congress ever get in trouble? Seems they can just bumble along any old way they please. Oh, I know the voters have the final say. If members of Congress screw up, they can be voted out of office.

Of course, we all know how that works. Incumbents have all the perks. They have all the special interest money. They have the most ads on TV They keep winning. They're really good at getting re-elected and staying in power.

So basically, congressmen are like weathermen.

Like Thursday. I had an interview in Plymouth at 12:30 p.m. It was chilly in the morning, but I looked at the weather on the Internet. I looked at three different sites. The Weather Channel, Weather Underground and NOAA. All three said it would be sunny and 63 degrees around noon.

OK, I can ride the motorcycle to work. It will be a little chilly in the morning, but by noon, it'll be a pleasant ride to Plymouth and back in the afternoon.

At 12:30 p.m. it was 46 degrees and cloudy. Another chilly ride I could have easily avoided if only the weathermen knew what they were talking about.

Did those weather forecasters get held accountable in any way? Anybody get fired? Anybody get reprimanded. Nope.

Just like congressmen, they can screw up ad infinitum and we all just put up with it.

And this budget thing is really annoying.

Just this week Federal Reserve Board Chairman Alan Greenspan had some interesting things to say to Congress. Trouble is, it probably fell on deaf ears.

Greenspan, who is Washington's top economic expert, told Congress that rising budget deficits will cause the economy to "stagnate or worse."

But Congress doesn't really care.

Worse than the fact that they missed the joint resolution is the fact that they probably will fail to pass any budget at all. If that happens, lawmakers don't have any spending guidelines.

So then the 13 spending bills that fund the government get passed piece by piece. Whatever gets left out, and that's a whole bunch, generally, gets piled into one gigantic entity known as an omnibus appropriations bill.

That is precisely what has happened in each of the last three years with the Republicans firmly in control of Congress. This is not a good thing.

See, what happens is the omnibus bill swells. All the congressmen see it as pretty easy to add stuff in there. The larded-up monstrosity generally passes before anybody has a chance to read the whole thing.

The process is only partially to blame for the deficit problem. All the pork barrel spending our venerable leaders could imagine wouldn't run up the record $377 billion deficit of two years ago. Or the new record $412 billion deficit last year. Or the projected new record $427 billion deficit for this year.

There's plenty of blame to pass around when it comes to deficits, but mainly, Congress likes to spend and W hasn't done anything to rein it in. Not one veto. Far from it. W supported huge increases in farm subsidies and expensive new government programs.

The war in Iraq has been costly, to be sure, but the biggest increases have been in discretionary domestic spending.

Bottom line?

Last year the U.S. government spent $322 billion of your money on interest payments to the holders of the national debt. By comparison, the Department of Transportation got $56 billion. Education got $61 billion.

This can't go on.

It threatens more than the economy, as Greenspan notes. It threatens the stability of the U.S. dollar. Right now, the dollar is the international trade standard.

But listen to the recent comments of Malaysian Prime Minister Mahathir Mohamad. (This guy also served as Malaysian finance minister, so one can assume he knows a little about these things.)

He said the U.S. budget deficits are forcing the U.S. dollar toward "imminent collapse" and the global economy will suffer a "catastrophe" when the dollar is rejected as the currency for trade.

He spoke at a conference of 650 chief execs from 30 countries in Kota Knabalu on the island of Borneo March 29.

He said the dollar was retaining some value because of fears of a global economic catastrophe if it was rejected.

The Star newspaper offered this quote: "But the catastrophe will come one day because even the most powerful country in the world cannot repay loans amounting to seven trillion dollars."

Mahathir said he believes central banks worldwide were reducing their U.S. dollar reserves and he suspected that Malaysia was also switching to other currencies. Telling reporters that he was giving his personal views, he warned, "Unless (the Americans) ... have a more responsible president who will try to reduce the deficit, they will have serious trouble with the US currency."

Our lawmakers need to get serious about this. They need to adopt policies to address the deficit - yesterday.

They need to set some realistic and achievable spending and revenue targets. But you know what? They're not even talking about it. It's not even on their radar.

When the weatherman screws up, the consequences are annoying - a chilly motorcycle ride, a wet picnic.

If our esteemed leaders in Washington keep screwing up the deficit problem, I assure you, the consequences will be far beyond an annoyance. [[In-content Ad]]

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