BCT Editorial – 8/7/06

This page was last updated on August 7, 2006.

Deeper in debt; Editorial; Beaver County Times; August 7, 2006.

Below is a detailed critique of the subject editorial.

“Read the following and weep for future generations of debt-burdened Americans:”

[RWC] Talk about a drama queen!

“‘The Treasury Department, which brought back the 30-year bond earlier this year to help handle a soaring federal debt burden, announced Wednesday that it will double the number of auctions for the popular security next year,’ The Associated Press reported.

“The 30-year bond was discontinued in 2001 because the federal government was running huge budget surpluses.”

[RWC] That would be a nice story if it were true. The feds discontinued the 30-year bond because they had to pay a higher interest rate for the 30-year bond vs. bonds of shorter duration. The idea was to reduce the cost of borrowing.

Five years later the situation is a bit different. Currently, long-term interest rates are relatively low and reinstating the 30-year bond would reduce the cost of borrowing. It would also allow the feds to refinance some short-term debt.

“Despite the Bush administration’s boasts about cutting deficit spending, the debt is going to keep getting worse. The AP reported the debt ceiling, which now stands at $9 trillion, will have to be raised next year.

“Oh, for the way it was five years ago.”

[RWC] Let’s look at “the way it was five years ago.”

· We were the better part of a year into a recession that began during the final year of the Clinton administration.

· Unemployment was increasing.

· We were just beginning to learn of a group of major business scandals (Enron, et cetera) that occurred during the Clinton administration.

· Oh yeah. It was just about one month before 9/11.

This was “the good old days” to the Times?

Finally, while the Times cries crocodile tears over the debt and deficits, when was the last time an editorial advocated serious budget cuts to help the situation? If you answered “never,” you win. Indeed, editorials routinely complain about this or that “underfunded” program. (Note: If you say complaining about the Medicare prescription drug plan counts as advocating a budget cut, you’re wrong. Remember, at the same time editorials disingenuously whine about the prescription drug plan, other editorials lobby for a taxpayer-funded national healthcare system, a system that would pay for prescription drugs for everyone, not just people on Medicare.)