Stimulus won’t remedy debt-and-deficit woes

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September 8, 2010

By Sid Salter The Meridian Star The Meridian Star Wed Sep 08, 2010, 06:00 AM CDT

MERIDIAN —     As the 2010 midterm elections approach, Democrats are poised to almost certainly lose control of the House and to slide close to parity or even lose the Senate as well — although that’s a longer shot for Republican opponents.

   President Barack Obama’s political popularity and public confidence in his policies have never been lower. In a recent Gallup Poll, 59 percent of respondents disapproved of the president’s handling of the economy.

   Still, the White House claims the multi-year $814 billion 2009 stimulus program raised employment by between 2.5 million to 3.6 million jobs and raised the nation’s annual economic output by almost $400 billion. A number of bi-partisan economists agree.

   But some 30 percent or some $244 billion of the original $814 billion 2009 stimulus appropriation remains “in the pipeline” and has yet to be expended. Shouldn’t Congress hold off and let the rest of the original stimulus be expended before we hit the panic button and pass another massive federal spending bill?

   If one includes the George W. Bush administration tax rebates and other economic crisis spending, total stimulus spending is already pegged to surpass $1 trillion in a few years if Congress doesn’t appropriate another dime.

   Instead of another federal stimulus spending bill, perhaps it’s time that Democrats and Republicans alike begin to address the root cause of most of America’s fiscal problems — debt, deficits and entitlements.

   The national debt stands at $13.4 trillion, or $104,000 for every U.S. household. President Obama’s $3.8 trillion budget proposal for Fiscal Year 2011 only identifies $2.57 trillion in revenue while running a $1.27 trillion deficit, continuing deficits begun in the Bush administration.

   Back in July in Boston, the National Governors Association heard one of the most important and relevant warnings about true danger to the American economy.

   The bipartisan presidential commission on the nation’s debt and deficits — led by former Clinton administration White House chief of staff Erskine Bowles and former Wyoming Republican U.S. Sen. Alan Simpson of Wyoming — told the nation’s governors that current budgetary trends constituted “a cancer that will destroy the country from within” unless Congress and the White House takes action.

   The basic premise of the Bowles-Simpson presentation to the governor's association was that present federal revenue is consumed by the obligations of three federal entitlement programs: Social Security, Medicare and Medicaid.

   Another stimulus, more spending, doesn’t address that basic problem. If President Obama is out of touch with the American people on one key issue, it is that debts and deficits have begun to matter to American voters.

   Now comes the Obama administration with another stimulus plan — $50 billion in infrastructure construction, $100 billion in research tax credits over the next decade and new business tax deductions over the next two years for investment in new plants and equipment.

   But what neither President Obama nor Congress are talking about are serious, substantive policies to address federal debt and deficits or a plan to restructure and restore existing Social Security, Medicare and Medicaid entitlements.

   That scary fact will impact Mississippians more than another stimulus.

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