- WASHINGTON --What does a
record federal deficit mean to most Americans? Absent action, Uncle Sam
will go in the red another $1.4 trillion over the next decade, the Congressional
Budget Office says.
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- That's $4,795 for every man, woman and child in the
United States atop their $23,400-a-person share of the national debt racked
up over the nation's 227-year history.
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- President Bush wants $87 billion more for Iraq next
year. That item alone adds $298 to each American's share of the 2004 deficit
and pushes White House deficit guesstimates above $500 billion apiece in
the fiscal year that ends Sept. 30 and the new fiscal year.
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- That's $1 trillion of red ink this year and next - a
total that Bush spokesman Scott McClellan calls "manageable."
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- Douglas Holtz-Eakin, the top Bush White House economist
picked to head the Congressional Budget Office, isn't worried short-term,
either, but concedes "choices do matter" over the long haul.
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- With $1 trillion, you could:
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- * Send 1 million students through an Ivy League school
for four years, or finance a public university degree for everyone without
one. The payoff: adding $20,000 a year to a high-school grad's $26,958
average paycheck, the difference between a college diploma and a high-school
diploma in average earning power.
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- * Provide every U.S. household with a 7 percent down
payment on a $146,000 median-priced house, including a home for the 33
million families who rent and vacation homes for the 67 million who already
are homeowners.
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- * Put a new car in every garage - or put a chicken in
each American household's pot every day for the next seven years. For fast-foodies,
$1 trillion buys 370 billion Big Macs, based on the $2.71 average U.S.
price in the Economist magazine's Big Mac Index.
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- * $1 trillion worth of federal deficits amounts to a
stack of $100 bills 67,000 miles high.
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- Just the money spent on Iraq could provide health care
for every American, says former Vermont Gov. Howard Dean, a Democratic
presidential front-runner and physician by training.
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- For now, however, deficits aren't dominating political
debates the way they did in the 1970s and '80s after the "guns and
butter" days of Vietnam and the Great Society, which helped ignite
double-digit inflation, sky-high mortgage rates and the deepest recession
since the Depression.
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- For now, deficits don't seem to have much impact on
the economy, either.
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- "It's a different game today when government borrowing
doesn't exert as much pressure at a time when mortgage rates are at their
lowest level in 45 years and inflation is at a 40-year low," says
Standard & Poor's chief economist David Wyss.
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- What happens once the economy picks up steam is another
matter, says MIT economist and Nobel laureate Robert Solow, who frets that
budget deficits will fall prey long-term to Bush tax-cut and spending priorities.
"Surplus? All we have to show for it is the city of Baghdad,"
Solow fumes.
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- Sooner or later, economic expansion will take hold,
and Uncle Sam's massive borrowing costs will bump up against investment
needs of private employers that are seeking to modernize and consumers
looking to attain or maintain a comfortable lifestyle.
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- Eventually the federal bills come due, too, including
those Social Security IOUs that 76 million baby boomers built up by paying
payroll taxes to cushion their retirement.
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- Boomerang grads moving home after college to cut costs
shouldn't be so preoccupied about whether their chances of seeing a Social
Security check are less than sighting a UFO, as a Scripps Howard News Service
poll once found.
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- If Mom and Dad don't collect their Social Security,
they may move in on you in later years. "As they say," says economist
Wyss, "what goes around can come around again."
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- http://www.knoxstudio.com/shns/story.cfm?pk=DEFICITS-09-12-03&cat=WW
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