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Wallowing in debt




February 14, 2004








“It’s all Greek to me,” say most people when budgetary numbers in the millions, billions and trillions are tossed out relative to deficits, debts, appropriations and interest. As the Clintonites used to say, “It’s the economy, stupid,” and understandably stupid most of us are when it comes to the vagaries of economic theories. 


Oddly enough, there’s more Greek involved here than you might think, since our word “economy” is derived from two Greek words: oikos (house) and nomos (law). Hence economy is the law of the household. And that, perhaps, we all can understand, since most of us are involved in running a household and making ends meet.


In our capitalistic system there are all kinds of households. The federal government is a household, as are state and local governments. Corporations are households, as are school systems, public libraries and food or clothing stores. The list goes on, but the point is that all of these entities must have fiscal laws that govern their operations – their economy, if you will. Yet, all of these households depend for their success and sustenance on your household and the way you dispense your money, whether it be through taxes, shopping sprees or charitable giving.


As a result, it is imperative that you run your household in accordance with laws that will allow you to meet your financial obligations without going into deep debt or, even worse, bankruptcy. Because if you fail to obey the laws of your household and hence cannot meet your obligations, all the households dependent on your ability to cough up money will fail too. This is what we might call burble-up economics, as opposed to trickle-down economics.  


The biggest household of all is the federal government, which, in accordance with various economic laws passed by Congress, returns money to state and local governments to be used for education, mental health, Medicaid and a host of other programs. And this worked well though the late ‘90s, when the government was running a surplus of $4 trillion. 


Now, however, as a result of inane tax cuts, a senseless war in Iraq and corporate tax giveaways, the federal government has so frazzled the law of its household that this year it will be running a $521 billion deficit and a $3 trillion debt, the interest on which is $177 billion. The deficit is the amount of money the government will have to borrow to meet present budgetary demands, while the debt is the amount we owe as a result of borrowing to cover this and earlier deficits. 


What results from all this is trickle-down debt, since it affects every household, including yours, dependent on government money. Little wonder, then, that Virginia is wallowing in debt and dealing with a $1.2 billion shortfall. To make matters worse,  the  do-nothing, head-in-the-sand ostriches on the House Appropriations Committee slammed the door on Gov. Mark Warner’s tax reform plan and vowed to fulminate forevermore in the optative mood about future economic booms.


Too bad if professors are bailing out of Virginia’s top colleges and universities at alarming rates. Too bad if the mentally ill wind up in jails instead of hospitals. Too bad if Medicaid for poor families and children has to be cut. Let us have our debt and revel in it. Even better, let’s cut taxes again and increase the deficits. Or perhaps the best thing is to propose spending $8.1 billion more than the governor wants. That’s the pork-laden menu the stiff-backed, no-new-tax armadillos in the House of Delegates have cooked up.   


And so the debt trickles down to the households of our local governments.  


While James City County is not among the poorest of Virginia’s counties, it too has it’s household law to deal with. As a result of a cut in state funds and an unexplainable inability on the part of planners and supervisors to rein in growth and disappoint developers, the county now faces a crisis in funding for education and increased demands for funds from social and health support agencies.


The response of county administrators to requests such as this is not heartening. Noting a loss of state funds, Finance Manager John McDonald can offer only a fraction of what educators and agencies need to carry on their cash-strapped work. Nor does it help that the same blockheaded approach to household law as pervades the House of Delegates seems to be flourishing on the Board of Supervisors. Their answer to financial desperation is, you guessed it, to cut real estate taxes and approve two new housing developments.   


In short, it seems that the only households that are attempting to obey some rational monetary law are those of individuals valiantly trying to make a living in a nation that, since the advent of George W. Bush, has lost 2.5 million manufacturing jobs and allows 13,000 of the wealthiest households to make more money than 20 million of the poorest. 


If we cooked our household books in the same way that our various governing bodies and runaway corporations have roasted theirs, we’d all be in the pokey, decorating cells with Martha Stewart. 


Is this really any way to run the nation’s households?         

















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