No Time for More Spending & More Debt
I read with great interest Robert LaJeunesse’s guest commentary that implored the city to spend its tax surplus. Adopting the logic to spend more as outlined in the article would be nothing short of madness. It is rather amazing that in the current economy, some still choose to stick their heads in the sand and just hope for the best.
He asserted that “the recent downgrading of U.S. debt and the subsequent lowering of interest rates is more evidence of the waning influence of the credit rating agencies.” Not quite. When the agencies saw the national deficits continuing to explode they downgraded the country’s debt. What the credit rating agencies did has a name. It is called responsibility.
The subsequent reduction in interest rates following the downgrade was not a result of the “waning influence of the credit rating agencies.” The reduction in rates was but a simple reaction to federal policy. Interest rates declined because the printing presses at the Federal Reserve now run 24 hours a day just to keep pace with the nation’s deficit spending. When you print all that money and shove it into the economy, interest rates fell. Why? Because, all that money flooding into the system went into stimulus holes that have not created any real economic growth. It’s the monetary policy equivalent of the government’s free cheese program – sounds good at first but leaves one constipated after having consumed it all.
I suspect (and hope) that in times of continuing economic turmoil, more of us would be willing to “navigate the tree roots on Cavalier Trail” and wait a few more days to “borrow an e-book from the library.” And dare I say, the future of generations travelling in “a baby stroller” on city streets now is far more secure when those generations are unshackled from the debts of their forefathers.
The Falls Church City Council has much larger economic issues to worry about right now. The city council’s exercise in prudence and portraying their consideration of a rainy day fund as an “excuse” also has a name. It is called irresponsibility.
In the current economic climate, the influence that is certainly waning is that of the peddlers who are calling for more government spending and more debt. The city council is certainly wiser to be aware of such a decline.
Danny R. Smith
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