Editor:
The Sunday Gazette-Mail's reprint of an Orange County Register editorial "Red ink as far as the eye can see" quoted the Congressional Budget Office's forecast of burgeoning budget deficits over the next generation.
As an economic hobbyist I am less fearful than CBO's bleak outlook would suggest. Fears of inflation due to easy money policies established by the Federal Reserve in response to the Great Recession of 2008 have been dramatically overblown. Consumer demand constrained by a lack of spendable income is simply not consistent with the development of inflationary pressures that would justify such fears.
By now it is widely accepted by all but the most recalcitrant that household income figures have barely improved over the past generation while the greatest portion of the income increases attributed to GDP and unit productivity growth have accrued to those at the very highest income level. These funds have been invested internationally, in the domestic securities markets, and hoarded in off-shore tax havens. They have been and are currently unavailable to domestic circulation and new capital formation.
That said, a corresponding fiscal policy promoting domestic repatriation and multiplier effect of these hoarded sums represents the resolution to the current budgetary impasse. CBO's assumptions omitted the expected multiplier effect that such a fiscal policy would realize. Ideology and its associated political divisiveness represent the sole reason for this budgetary stalemate.
I dislike our "do-nothing" Congress as much as any American. Yet history has repeatedly demonstrated that crisis, or the perception thereof, eventually imposes the necessary political compromise. The character and equity of the eventual compromise has yet to be determined by the voters.
I never bet against the American people. Despite human frailties, Americans have always followed their best instincts and principles when addressing the nation's needs and ills. There is every reason to believe they can and will do so again.
Jerry Spiegler
Nitro