Falling deficit an overblown threat [Letter]

December 24, 2013

A reader recently expressed concern over the federal deficit and faults the Democrats for failing to come to grips with entitlements ("Republicans aren't to blame for Washington gridlock," Dec. 20). He describes the state of our federal budget as a free fall into bankruptcy. In my opinion, these views are sheer nonsense. If our economy were threatened, interests rates would be sky high and investors and foreign governments would be dumping our treasury notes. Instead, interest rates are at record low levels and investors worldwide are clambering to buy U.S. government securities.

The facts are that the federal budget deficit has come down drastically in recent years from $1.4 trillion in 2009 to an expected $845 billion by the end of fiscal 2013, according to projections of the Congressional Budget Office. Given continuing sluggish employment, this kind of deficit is quite appropriate. Once our economy reaches nearly full employment, the deficit is expected to fall to about $400 billion, a sustainable level. So what is really required now is a robust economy leading to full employment.

One way not to achieve that objective is to embrace a policy of austerity and cuts in government spending. This is a lesson painfully learned by British and other European nations. I suspect that many budget hawks are using the deficit as a weapon to reduce social programs that have made this nation great since FDR's New Deal. Entitlements, including Social Security, Medicare and Medicaid are essential to a prospering society. Their immediate fiscal solvency is sound. Adjustments will be required in the long term and are readily apparent. Social Security, for example, can be put on a long term sustainability by simply raising the current threshold of income subject to taxation from about $117,000 to $250,000, thereby eliminating one of the many tax provisions favoring the wealthy.

If the reader were truly concerned about existential threats to the nation and its economy, he should be worried about global warming and income and wealth inequality, conditions that, if left unresolved, could truly devastate this nation.

Jack Kinstlinger, Towson

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