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Trusted local news leader for Prescott area communities since 1882
9:28 AM Wed, Sept. 19th

Letter: There's no spinning our economic crisis

EDITOR:

After reading Ron Woerner's letter of Aug. 25, I feel I must respond. Mr. Woerner speaks to the fact that this year's federal deficit will be 30 percent lower than the previous year and a six-year low. This is what is called spin.

What Mr. Woerner failed to tell readers is that this year's budget will add billions to the national debt and, during the Obama years, trillions have been added. Furthermore, Obama will add more to the national debt by dollars than any president in history.

Now while both sides spin the debt issue, the important thing to keep in mind is that the debt is approaching $18 trillion, the debt by percentage is outpacing GDP, and the interest rate for T-bills is near zero.

So why is this important?

Number one, you want GDP to outpace debt. The first quarter, GDP was negative, the second quarter, 4 percent (which will probably be downgraded), and the projection for the year under 2.5 percent. Interest rates are at historic lows. If you invest in T-bills, you are losing money. Equities are returning double-digit returns. Real estate is returning 5 to 8 percent. Will we find enough investors? What happens if the fed raises the discount rate in 2015? This will add billions in interest payments.

What I have stated are facts and concerns. We must all remember that Andrew Jackson was the only president to erase the national debt. While Clinton had budget surpluses, he also added to the national debt during his terms and, when he left office, the country was in a mild recession.

The only way we can reverse the current trend of debt and GDP is with real jobs and a real wage increase. During the Reagan years, a million jobs were added monthly with real wage growth. During the Obama recovery, we celebrate 200,000 jobs, most of which are low-paying part-time jobs.

Let us not fool ourselves or be fooled by spin doctors ... this country is in real trouble.

Michael Oskins

Prescott