Deficit Spending

PARIS -- Marking his second Bastille Day yesterday as president of France, Jacques Chirac told his disgruntled compatriots that, in effect, they couldn't have their cake and eat it, too -- that years of high deficit spending and mismanagement meant that they would have to sweat through high unemployment and high taxes to pay off deficits for at least another year before recovery set in.But then, perhaps mindful of Marie Antoinette, he invited thousands of...

AFTER SEEMING for more than a year to be in free-fall, the U.S. dollar gained more than 10 percent in value against the Japanese yen in less than two months, but last week, it gave back a big chunk of those gains over a few days. What's going on? Is the dollar's recent strength sustainable? What forces will work for and against it?David DonabedianChief econimist, Mercantile Bankshares Corp.The declines we've seen in the dollar in the last few days are basically a temporary correction to a real tear the U.S. dollar has been on over the last four months.

Peace WorkOn July 20, 1994, Max Obuszewski, a local peace activist, was arrested at the Johns Hopkins University Applied Physics Laboratory after refusing to stop the distribution of leaflets opposing the work of the APL in nuclear weapons research.On Jan. 9, 1995, facing a charge of trespass before Howard County District Court Judge Louis Becker, Mr. Obuszewski was convicted and sentenced to 30 days in the Howard County Detention Center -- a sentence we consider excessive.Judge Becker based his decision on the argument that the APL is a private, rather than public, institution.

MOSCOW -- President Boris N. Yeltsin's state of the union address yesterday might better have been titled: "What's Wrong with Russia."In an hour-long speech to a joint session of the Federal Assembly, or parliament, Mr. Yeltsin touched on all the major ills of a nation in serious trouble.Crime, pervasive bribery, corrupt and smothering officialdom, capricious taxation, the power of lobbies, inflation, deficit spending, a decline in the arts, a lack of respect from other nations -- they all demand action, Mr. Yeltsin said.

Washington. -- Democrats are trying to revive their flagging spirits and reverse their sagging fortunes by attacking the ''contract'' that Republican congressional candidates have signed. The core of the contract is a constitutional amendment to require a balanced budget, an idea many Democrats and much of the intelligentsia call ''simplistic.''But now comes James Q. Wilson, past president of the American Political Science Association and no simpleton, defending the amendment as a sound response to the current tensions between American's political and constitutional systems.

TOKYO -- A tentative compromise yesterday over an economic stimulus program rescued Japan's shaky coalition government from dissolution.Under the agreement, the coalition agreed to push ahead with a $55 billion reduction in income taxes. The most contentious issue, how to fund the program, was shelved until later.The compromise by coalition leaders opened the way for the approval of a long-awaited spending plan to help Japan out of its economic doldrums. That sent Japan's stock market soaring today.

By Senate Majority Leader George Mitchell's calculation, at least one-fifth of the Senate is a fraud. We think he is being modest. We would guess at least one-third of the world's greatest deliberative body is so craven, so fear-ridden, so lacking in principle and courage that it would vote to muck up the Constitution with a balanced-budget amendment that most members know is a phony.Lest Mr. Mitchell charge that we exaggerate, here is how we figure. The Senate just voted 63-37 for the proposed amendment, four votes shy of the two-thirds majority required for changing the Constitution.

President Clinton just has to triumph in today's expected House vote on his core economic plan. A defeat for the new chief executive, lately the butt of jokes nationally, would be devastating to his administration, his party and the country. Whatever citizens may think of his sorry performance in his first four months in office, we believe the majority cringe at the prospect of a failed president.Although Mr. Clinton can prevail in the House only by compromising with deficit hawks who are determined to restrain runaway government benefit programs, he need not -- and should not -- take that as a setback.

WASHINGTON -- From the moment President Clinton offered his budget proposal, the White House has repeatedly characterized it as a bold and courageous departure from business-as-usual.Cabinet officers, administration spokesmen, the vice president -- even Mr. Clinton himself -- unabashedly describe this budget as some kind of revolutionary document. Interior Secretary Bruce E. Babbitt actually used that word, "revolutionary."In a subsequent radio address, Mr. Clinton said that his plan "makes dramatic reductions in deficit spending, over 150 specific cuts in domestic programs, and asks a contribution from every American based on his or her ability to pay -- all to get the deficit down."

Here is how members of Maryland's delegation on Capitol Hill were recorded on important roll-call votes last week:YES N: NO X: NOT VOTINGHOUSE: JOBLESS BENEFITSBy a vote of 301 for and 114 against, the House appropriated $4 billion in immediate deficit spending to provide up to 26 weeks of additional unemployment checks for those who have exhausted their initial 26 weeks of benefits. The bill (HR 1335) was sent to President Clinton. It was all that he and congressional Democrats could salvage from a $19 billion-plus economic stimulus proposal that hours earlier fell victim to Republican opposition in the Senate.

A parade of American presidents, from Eisenhower on, all warning of the inherent peril of runaway spending. A Saturday Night Live skit. A graphic presenting America's budgetary history as a roller-coaster ride of epic proportions. An out-of-control screed by an analyst losing it in front of a national TV audience. I.O.U.S.A., a documentary being screened three times at this weekend's 10th annual Maryland Film Festival, uses every tool available to drum home its message that deficit spending is bad, that a country built on it is heading for nowhere but trouble.

The governor of Maryland recently brought to mind the majestic though scary sight of astronauts floating outside their spacecraft, endeavoring to make repairs. Walks in space are usually successful, but the peril is inescapable, along with the questions: Does he have the right tools? Will the tethering umbilical hold? Can the work be done in one walk, or will another be needed? Will the support crew do its job? Maryland's ship of state had soared into the remoteness of deficit spending before Gov. Martin O'Malley arrived in Annapolis.

Anybody notice the purple lights on the Washington Monument lately? Too late now if you haven't. They switch back to white tonight, now that it's March. But all last month, the monument glowed purple. Why? Well, it was actually a bit of a mistake, says Jennifer Morgan, director of community outreach for the city's Recreation and Parks Department. Rec and Parks agreed, at the request of the Maryland branch of the American Heart Association, to shine red lights on the monument during February, for national heart month.

JUST AS THE AVERAGE American taxpayer is beginning to enjoy $15 a week in extra spending money thanks to President Bush's latest tax cut, new White House budget forecasts peg this year's record federal budget deficit at more than $450 billion. Before the fiscal year ends, the problem created by this administration's irresponsible tax and spending policies is likely to grow even greater. This year's deficit already exceeds Democrats' most dire predictions at its start and by more than $150 billion the prior record deficit of 1992.

WASHINGTON - When President Bush was elected, the nation enjoyed a budget surplus of $200 billion. The government had money to properly fund programs such as education, health care and prescription drugs for seniors. Now, our economy is in a vastly different place. We live with a stagnant economy and increasing unemployment. The number of unemployed Americans has grown from 5.9 million in May 2001 to 8.5 million in April this year. Two years after Mr. Bush implemented a tax cut touted to stimulate the economy, we are moving in the wrong direction.

ARLINGTON, Va. - Washington was buried under snow last week. That's nothing new for this town, which gets snow jobs year round from the politicians of both parties (and the independents, too). Democrats - and some Republicans - are wringing their hands over the Bush tax cuts and the administration's proposal to let their full impact take effect this year. The familiar laments are heard on the political streets, on some editorial pages and on television: "We can't afford it." "This is a sop to the rich."

WITH MIDTERM elections safely behind him, President Bush tacitly acknowledged yesterday that Democrats who tried to make the economy an issue hit a perilously soft spot in his record that he can't afford to ignore any longer. From job losses to stock losses to anemic growth, just about all measures of the nation's fiscal health have taken a dive since Mr. Bush took office. What's more, there's been little sign that the president is actively about the business of prompting a rebound. Maybe a president can't actually do much about the economy.

The state's projected $1.7 billion deficit has the six candidates vying for three delegate seats in House District 31 talking about fiscal responsibility. In this northern county district, incumbents Joan Cadden, John R. Leopold and Mary M. Rosso have varying degrees of experience dealing with budget issues. Cadden, a Democratic delegate since 1991, and Leopold, a Republican first elected to the House in 1982, are members of the House Appropriations Committee, which considers legislation relating to the state's capital and operating budgets.

The economy is slumping, layoffs abound, corporate failures loom and the confidence of Americans in their nation's seemingly invincible economic power appears shaken in this new era of global terrorism. Still, in the face of significant economic and political uncertainty, many experts are predicting a swift recovery from the current recession, with employment rising and GNP growing by the middle of the coming year. That surprising confidence is founded on a promised revival of the recently-neglected economic policies of John Maynard Keynes -- the British economist who rescued the United States and the world from the Great Depression a half century ago. Keynes, who many believe to be the most brilliant economist of the 20th century, appears to be returning to center stage, after being shadowed for decades by more conservative thinkers.

THE TIMES cry out for the economic stimulus that President Bush proposed to Congress. It should be large, immediate and temporary. The package entails one year of federal deficit spending, whether that is admitted or not. It should not be allowed to usher in a new decade of deficit addition that would raise interest rates and curtail growth. The conversion of Federal Reserve Board Chairman Alan Greenspan to sooner rather than later paves the way to agreement. The president wisely offered parameters that meet the concerns of his political opponents.