ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Friday, October 4, 1996 TAG: 9610040029
SECTION: BUSINESS PAGE: A-7 EDITION: METRO
SOURCE: JEFF STURGEON STAFF WRITER
In a speech to businesspeople, the leader of an anti-deficit group said the national debt is growing and Washington hasn't fixed it.
But Martha Phillips said she won't stop stumping for solutions to the issue. She travels the country to appearances and political events. When politicians and candidates see her coming, they say, "Oh no, not the Concord Coalition," she said.
Phillips is executive director of the Washington, D.C., group, which publicizes federal budget overruns and advocates balancing the government's budget.
The Roanoke Regional Chamber of Commerce was her host at the Patrick Henry Hotel on Thursday. The national group has a 400-member Southwest Virginia chapter.
According to a coalition brochure, the federal government has run a budget deficit for 26 years and the accumulated debt has quintupled from 1980 to 1995 to more than $5 trillion. The deficit is the difference between the money spent and the money taken in by the federal government each year - an amount that must be borrowed from citizens, businesses and organizations such as pension funds around the world.
The difference between revenues and spending was $116 billion, about 7 percent of the $1.5 trillion budget, in the most recent fiscal year, which ended Monday, Phillips said.
A year's worth of interest on the debt now equals the "income taxes paid by all those living west of the Mississippi River," according to the organization's handouts.
Phillips said the borrowing saps resources for education, technology and other investments that would raise worker productivity and, ultimately, living standards.
Phillips' contention is a popular one, though it is not universally held, said Richard Cothren, associate economics professor at Virginia Tech. It's derived from one school of thought on the debt, which also holds that federal borrowing increases interest rates.
Other economists have called the debt a huge miscalculation. Federal expenditures, such as those to create and maintain highways and national parks, produce assets that effectively secure the money borrowed to make them, that viewpoint holds. If government accountants looked at the world this way, the debt would look smaller.
Phillips said Congress and President Clinton gave the deficit issue "lip service" without reigning in the costliest programs - Social Security, Medicare and Medicaid - during the recently ended congressional session. It will help some, she said, that politicians set limits on welfare benefits and farm subsidies.
"The problem with the deficit is, it's not like a wolf at the door," which would trigger quick action, she said. "The problem with the deficit is, it's like termites in the basement."
After her speech, one man stood. Then a few other people did. Then almost the whole room gave Phillips a standing ovation.
LENGTH: Medium: 60 linesby CNB