Letter to the Editor: OP-ED

To the Editor:

I'm moved to write a rebuttal to the Op-Ed piece by Joshua Carvalho ("I like having More Money," Tech News vol. 66, no. 8, page 5).

I, like Mr. Carvalho, want as much money in my pocket as possible and to pay the federal government as little as possible. Where we disagree, however, is in the means to that ends. He wants to create economic stimulus and to improve the standard of living for Americans by cutting taxes. I want to do the same by using the current federal budget surpluses to pay off the federal debt.

The author is mistaken to credit the economic expansion of the 1990s, and today's resulting budget surpluses, to the economic policies of the Reagan administration. Reagan's policies yielded hundreds of billions of dollars in deficit spending, year after year, each deficit greater than the last. His legacy? A staggering federal debt. I'll give Reagan his due. By using the American People's credit card, he outspent the Soviet Union on national defense and brought an end to the Cold War. But to credit Reagan for a robust economy 10 years after he left office and six years after the recession of 1991 is a blind leap of Republican faith. A more likely explanation is a commonly held opinion of economists and historians: the pivotal moment for the economic recovery of the early 90s and the ensuing record-breaking expansion was the bipartisan, balanced budget agreement (read: no deficit spending) of 1993.

So let's take a hard look at the Reagan legacy--that mountain of debt. Who do you think will have to pay it off? If you didn't instantly realize "That'll be me," you're too dim to be a WPI student. Meanwhile the interest on those loans is accumulating like snow in a blizzard. Perhaps Mr. Carvalho wasn't aware that in recent years the largest line item in the federal budget has been interest payments on the federal debt. The biggest chunk of your tax dollar isn't paying for national defense, education, welfare or even Social Security. It pays the juice on the money that bought a B-1 bomber fifteen years ago. But the sad truth is that this debt is your debt. You can't escape it. And the longer you take to pay it, the more you will pay.

So what's the good news? Paying down the federal debt now will have a direct and long-term positive impact on the economy. The interest rate on loans for things like home-ownership and small businesses will go down. Productivity and employment will go up. And in just a few years, the federal budget, and our tax rates, will shrink. Our standard of living and our wealth will increase.

A tax cut can put a little money in your pocket very soon. Paying down the federal debt will put a lot more money in your pocket for a very long time.