ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Wednesday, August 14, 1996 TAG: 9608140014
SECTION: EDITORIAL PAGE: A12 EDITION: METRO
SOURCE: PAUL CALDWELL
I PARTICIPATED in one of The Roanoke Times' community forums recently where you asked for input on issues in upcoming elections. Many participants mentioned the federal budget deficit. I was surprised so many people worry about this, for I believe that a budget deficit is necessary to maintain a social safety net to fall back on in life's ups and downs.
To explain why I believe a budget deficit is necessary, I use the analogy of an average family. The family purchases a car, house, etc., on credit, and it will have these large debts for years. Although it will constantly be repaying these debts, new debts will be added over time. So, the family will always have debt, which usually remains at the same percentage of its income over the years.
This country operates much the same way. Our government borrows money through various measures, such as the sale of bonds. With this borrowed money, it invests in long-term projects and other needs, such as interstate highways, expensive research and development, helping victims of natural disasters or helping a struggling family if an income earner is injured in an accident. Like the family, the government constantly pays on its debt. And like the family, it is constantly adding new debts. However, for the most part, the debt stays at about the same level in the gross national product of the country.
Indeed, the debt as a percentage of gross national product has decreased significantly because of moves toward balancing the budget. Also, the United States has one of the lowest deficits, as a percentage of gross national product, among countries in the Organization for Economic Cooperation and Development.
Just as the need to invest in our future through deficit spending is necessary, I believe a deficit is necessary to circulate money throughout the economy. In a capitalist economy, money tends to flow toward the top and it usually remains static. A lot of money owned by the top 10 percent of the population remains in the hands of the top 10 percent.
A budgetary deficit is necessary to move some of that money toward society's middle and lower classes. By using deficit spending to finance a massive interstate program, for instance, money will go to construction workers, who will use it to purchase various items. In the days before deficit spending, money stayed at the top, and the livelihood of the average American was much less than today. Even accounting for inflation, the average, middle-class American today is much better off than he or she was 70 years ago.
Also, if money settles like that, at the top, it gives a disproportional amount of power to a disproportional number of people. And because power corrupts and absolute power corrupts absolutely, society's elite will use that money for the worse, such as for dirty politics.
Today, America is at a crossroads. We must decide what kind of government we want, and what we expect from it. If we want a compassionate government that cares for people and one that provides a multitude of benefits, we must accept deficit spending.
If, however, we want government to operate on a balanced budget, we must make sacrifices. Government programs and subsidies may be slashed significantly, and investment in our country's future may be drastically scaled back. Remember, if an average family operated on a balanced budget, the average family wouldn't own a house and two cars, and the American dream would be an apartment and a bicycle.
Paul Caldwell of Blacksburg is a student at Blacksburg High School.
LENGTH: Medium: 67 linesby CNB