Letters to the editor

Friday, February 8, 2008
Paul seeks fiscal responsibility

The Sentinel's editorial opinion concerning the economic stimulus package raised excellent points. Nevertheless, you were in error suggesting that the remedy is not a part of any presidential candidate's platform.

Ron Paul has been actively campaigning based on these very issues for well over a year now, and his repeated calls for greater fiscal responsibility are in line with your opinion. Unfortunately, Americans have proven to be very uncooperative patients.

Paul Overway

Park Township
The LTE was written in rebuttal to the following:

Thursday, February 7, 2008
Stimulus plan treats symptom, not cause

Assuming the House and Senate quickly resolve their differences, sometime this summer most of us will get a check in the mail for $600 or more from the Internal Revenue Service. The checks are part of an economic stimulus program now before Congress and are designed to boost consumer spending and stave off the nation's first recession since 2001. Economists say the stimulus ought to do the trick -- they estimate the checks will boost gross domestic product by 0.7 percent this year, probably enough to keep the economy from sliding backward.
But what happens when the checks have been spent and the stimulus package has run its course? The United States may avoid recession for awhile, but the economic factors that have brought us to the brink of a national economic downturn will still be in place. We will have done nothing to correct our bad habits or remedy the imbalances that threaten to cause even more pain in the future.

After the stimulus package, we will remain a nation living beyond its means. We will not have done anything to change the fact that American households spend more than they make and our national government has done nothing to stanch its own red ink. In fact, we will go deeper into debt to avoid recession -- the stimulus checks are expected to add $100 billion to a federal deficit for the fiscal year already projected by the Congressional Budget Office at $250 billion. Of course, we've been getting away with such behavior for years thanks to foreign banks that have supported our overspending and kept interest rates low by snapping up our debt. However, there are signs those foreign investors may not be so eager to continue as our enablers with the value of the dollar -- and hence the value of their portfolios -- dropping. Meanwhile, on top of all the debt payments we send abroad, for the foreseeable future we will continue transferring further hundreds of billions of dollars overseas to pay for our unabated oil intake.

We understand the desire to stimulate the economy now -- given the impact of the subprime mortgage crisis, any economic dip now could turn into a prolonged tailspin. But when, if ever, will America be willing to accept the corrective action needed to restore economic stability? We have to rein in the freewheeling lending that extends credit to anyone at any time for any reason, but even the chastening effect of the mortgage debacle may not do that; our federal government is determined to keep interest rates low and credit easy. We need to control our federal deficit -- and soon, with the huge entitlement payments for the baby boomer generation looming in the not too distant future. But that's not part of any presidential candidate's platform. Ultimately, we need to bring spending in line with production and income. Historically, that requires a recession.

Recessions are painful, as we know in Michigan, where we've been in one for most of the decade. Economists can bandy about numbers and picture the economy in lines on a graph, but an economic slowdown means real-life suffering for real people. However, we can't ignore the excesses and imbalances that got us to this point. We can't continue applying Band-Aids (in the form of rebate checks) when what we really need is surgery. Sooner or later, we have to make the sacrifice, to swallow the bitter medicine, and it will be harder and harder to take the longer we wait.