“Deficits don’t matter.”
Former Vice President Dick Cheney made that observation while he was in office, and his administration was racking up annual deficits of hundreds of billions of dollars.
Cheney, of course, was as wrong about deficits as he was about weapons of mass destruction in Iraq. The piling on of federal debt, year after year, takes an increasing toll.
That’s more true today than ever, with Washington trying to jump start the economy out of its steep recession.
The success of this spending binge — which has been the handiwork of the Obama administration, although its origins can be traced to the dying days of the Bush administration — is mixed. For one thing, it’s impossible to say with any certainty how bad things would have gotten if no steps had been taken to stimulate the economy or bail out key industries.
Some analysts argue that the country could have suffered another massive economic depression, but there’s no way to prove that.
Conversely, other economists worry that Washington’s efforts may have had a short-term impact, but pose serious risks for the future. Not only have the bailouts and related actions skewed the free market system, ballooning federal deficits are running at levels far beyond anything ever seen before.
For the fiscal year that ended Sept. 30, the annual deficit was $1.42 trillion — three times higher than the previous year’s record amount. And the Obama administration anticipates deficits averaging close to $1 trillion per year for the next decade.
Officially, the administration has pledged to slash the deficit in half by the end of its term. But the Bush White House made the same promise to absolutely no avail.
And cutting the annual deficit by 50 percent isn’t enough. Washington’s willingness to spend money it does not have becomes increasingly dangerous as it grows accustomed to the practice. Just as an individual or business cannot operate on debt indefinitely, neither can the federal government.
There are two main dangers from uncontrolled deficit spending. One is that it will drive up interest rates as Washington competes with the private sector for limited funds. The second is that entities that acquire Washington’s debt may lose confidence in the government’s ability to meet its payments or maintain the value of the dollar.
In short, if Washington becomes a bad credit risk, the house of cards it has been crafting will collapse. Should that occur, the current recession will look quaint in comparison.
We believe Washington needed to act aggressively with the current recession. But with a measure of stability, the private sector must now return to the forefront. Part of that involves scaling back government spending with a goal of a balanced budget in mind.
It won’t happen overnight, but it must become a priority.
Editorials
EDITORIAL: Deficit dilemma
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Postal service’s financial woes not of their own making
It’s no secret that the U.S. Postal Service is experiencing financial troubles. One of the consequences of a deficit in the billions of dollars soon will become apparent in New Castle, when the city’s mail processing facility on Cascade Street is shut down.
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Our Opinion: UPMC, Highmark tangle for dominance. But what about the public?
Health insurance recipients in western Pennsylvania received some good news recently. The University of Pittsburgh Medical Center and Highmark Inc., the two local behemoths of the insurance and health care industry, reached an agreement to extend their contract with each other. The 18-month extension will be good through 2014.
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Our Opinion: Annual Jack Butz Award honors community involvement
During his lifetime, Jack Butz was known as someone who donated much to the community. And even now, years after his passing, Butz continues to give. We refer to the annual Jack Butz Award, where a local citizen is recognized for his or her contributions to New Castle and the surrounding area.
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Our Opinion: Why would New Castle weaken architecture standards?
There are times when communities must decide what they want to be. For New Castle, one of those times is arriving later this month. New Castle City Council is considering changes to the municipal zoning ordinance that will have the effect of seriously weakening standards for the North Hill Historic District.
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Our Opinion: A box from 1914 says something about the past — and today
The former Elks building in downtown New Castle was demolished months ago, but one bit of business remained. And city officials addressed that last week, when a time capsule from 1914 was opened.
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Our Opinion: Awareness campaigns protect generations of children
The first step in solving a problem is recognizing that it exists. That was a major factor behind the recent Walk for Justice at Cascade Park, organized by the Crisis Shelter of Lawrence County.
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Our Opinion: Secret Service scandal symbolizes breaches of public trust
There are a couple of pieces of good news regarding the Secret Service sex scandal. The first is that an investigation has determined the women hired as prostitutes by Secret Service agents in Columbia apparently were just that.
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Our Opinion: Municipalities save money with shared services
In difficult financial times, finding ways to use tax dollars more efficiently is an essential government task. That’s why we were pleased to learn that Shenango Township and South New Castle Borough have agreed to share police services.
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Our Opinion: State politicians use campaign funds in criminal cases
If you want to wage a spirited defense against criminal charges, you need money. A good attorney, after all, isn’t cheap. But if you are an influential elected official in Pennsylvania facing trial, this problem comes with a ready solution. All you have to do is tap into your campaign funds.
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Our Opinion: Resignation in Neshannock highlights leadership issue
With Neshannock Township now seeking a new manager, we hope the supervisors have learned something from their experiences so far. That’s because their efforts to date on selecting a manager for the municipality haven’t gone very well. Ironically, the questionable practices and decision-making displayed by the supervisors demonstrate the need for sound management in the township.
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Postal service’s financial woes not of their own making
