
                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: WEDNESDAY, June 23, 1993                   TAG: 9306230261
SECTION: EDITORIAL                    PAGE: A6   EDITION: METRO 
SOURCE: 
DATELINE:                                 LENGTH: Medium

DEFICIT SPENDING MUST STOP

AS AMERICA survives on borrowed money, one day we will have to pay for living beyond our means. Ever since Franklin Roosevelt popularized deficit spending in the '30s, we continue to spend more than we take in via taxes and other revenues. Roosevelt was faced with an economic depression and truly needed to reinflate our deflated dollar and fight a dwindling gross national product. The culprits have been ensuing administrations, and Democrats and Republicans who have institutionalized deficit spending. Another is the public that has elected or re-elected politicians on the basis of who could grab the most pork from the barrel and funnel said pork back to their district or state. Looking after your own is one thing; having a broader sense of where the buck stops is another. The net effect is a political process that by its very nature is not given to financial responsibility. Serious consequences result.

Interest due each year on our debt is roughly equivalent to all domestic income-tax receipts from states west of the Mississippi. Continual deficit spending means an enormous need for capital. An insatiable appetite for funds drives up the price of the domestic supply of capital (interest rates) for large corporations, mom-and-pop businesses and individuals. Lower (and occasionally negative) net revenue growth means relatively stagnant job growth and a slow-growth economy. In essence, we are financing a significant part of our present economic prosperity by leveraging our future and crippling our potential. This means leaving minuscule standard-of-living growth to our offspring, which means they must raise taxes and/or borrow even more to maintain the bloated government and its institutionalized services to which they've become accustomed. This leads to a lower disposable income that further diminishes real standard-of-living growth.

Some economists say that continued borrowing is not harmful because it merely represents a transfer of funds from one generation to another. This is oversimplified fluff.

I am surprised that Democrats, long a substantial consumer at the public trough, are pushing for further spending cuts. I hope this is not just the issue of the month.

Some government spending is necessary for economic or security reasons. But voters should demand that, in the long run, we spend roughly what we bring in through tax revenues, and that our existing government be as efficient as possible. PAUL R. CANADA ROANOKE

by CNB