paul volker on the us economy

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    maybe this has already been poseted - in which case please forgive me


    The Soaring Debt

    By Paul M. Weyrich

    April 14, 2005

    Paul Volcker, former Federal Reserve Board Chairman, recently published an op-ed in THE WASHINGTON POST that should concern any American who does not wish a return to the 1970s, when our country experienced soaring inflation and unemployment. His message is that our country again is �skating on thin ice� due to the deficits wracked up by our Federal Government�s overspending and the imbalance of imports over exports. He noted the American unwillingness to save money and the Congressional unwillingness to exert fiscal discipline. Volcker said we either should act now or face a return to the recession and inflation of three decades ago.

    When someone with Volker�s expertise speaks his words are not to be taken lightly. Volker has indicated that the best action to forestall high inflation and recessions � so-called stagflation � is that policymakers have the courage and foresight to take the necessary actions. Nothing �unorthodox� or �arcane� need be attempted, merely the exercise of simple fiscal discipline. He asserted, �What I am talking about really boils down to the oldest lesson of economic policy: a strong sense of monetary and fiscal discipline. This is not a time for ideological intransigence and partisan posturing on the budget at the expense of the deficit rising still further.� What he suggests is best encapsulated by the adage that one should not put off until tomorrow what can be done today.

    Some simple statistics underscore the urgency that Volcker perceives. The U.S. National Debt Clock website estimates that the national debt has increased by $2.16 billion every day since September 30, 2004. The public debt on April 13, 2005 was $7,797,142,067.29 and it is a safe bet that it is growing. The cumulative deficit in the FY 2006 budget resolutions of the House of Representatives and the United States Senate is in excess of $365 billion.

    Too many of our lawmakers seem unable to make the connection that the Federal Government cannot afford to spend beyond its means. Most families know they need to live within their means -- a simple principle which should hold true for the Federal Government.

    There is no shortage of proposals about how and where the Federal Government could reduce spending. Too often there has been an unwillingness to act. Credit must be given to Representative Mike Pence (R-IN), the Chairman of the Republican Study

    Committee, in his negotiations with the House Leadership to change the House Rules to allow a point of order while debating an appropriations bill exceeds its budgeted limit. A majority vote would be needed to allow the extra spending.

    Grassroots organizations must continue to press the White House and Congress to act decisively to hold down spending. One bill that the grassroots organizations must note will be introduced this week by Senator Sam Brownback (R-KS). It proposes that Congress create a Commission on the Accountability and Review of Federal Agencies (CARFA), composed of twelve members who would examine federal programs to determine those which are duplicative, wasteful or outdated. CARFA then would recommend to Congress those programs to eliminate or consolidate. In response, the Congress would conduct an up-or-down vote on each CARFA recommendation but could not amend it.

    There is precedent for this kind of legislation. The Congress authorized the Base Realignment and Closure Commission (BRAC) to close military bases that were not needed after the Cold War. CARFA, however, covers solely domestic discretionary spending.

    Senator Brownback introduced a CARFA bill in the last Congress and it enjoyed strong support from many members of the Senate Republican Caucus. A similar measure in the House is expected to be re-introduced by Representative Todd Tiahrt (R-KS). This is a measure around which Republicans should be expected to rally. So should House and Senate Democrats who truly are concerned about the red ink in our nation�s ledgers and want to make sure that the Federal Government operates on a more efficient and economical basis. Some Democrats indeed do express concern about the rising federal deficit, as I noted in a recent commentary on the �Blue Dog� Democrats.

    The Senate Subcommittee on Oversight of Government Management, the Federal Workforce and the District of Columbia held a hearing on Brownback�s CARFA bill on May 6, 2004. Paul Weinstein, Jr., Chief Operating Officer of the Progressive Policy Institute, the policy arm of the Democratic Leadership Council, testified that the last comprehensive effort between the White House and the Congress to reform the Federal Government occurred in the late 1940s and early 1950s when the highly acclaimed Hoover Commission, chaired by ...
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