Editorial in the Seattle Times: Don't engage in deficit spending

By Evan Rohar

In an editorial published on December 10th, the Seattle Times stated that, though it is legal for the state to engage in deficit spending, it is not a good idea. It is worth quoting a large part of the article:

"Borrowing to build a university hall is like borrowing to buy a house. Borrowing to pay salaries of state workers is like taking out a mortgage to buy groceries.

"The state has, in fact, engaged in deficit spending under other names. It was in 2003, at the bottom of the last recession, when the state started getting lawsuit-settlement money from tobacco companies. To balance the budget, the state sold $450 million of tobacco-revenue bonds. Legislators called it 'selling the tobacco money.'

"They didn't call it deficit spending, but that's what it was. It was different only in that it was pledging future tobacco money, not future general-fund money.

"In 2005, which wasn't a recession year, the Legislature did what was essentially deficit spending: It skipped the scheduled $325 million payment into state employee pension funds. That was also borrowing against the future, and we can remember former-Rep. Helen Sommers, the Democrats' guardian of financial probity, denouncing it. Such a thing hadn't been done in 40 years, she said.

"Washington already borrows billions for capital projects such as roads, ferries and university buildings. These are expensive assets that last many years, and borrowing spreads the cost over the generations.

"Now, delaying the $443 million payment due in 2009 seems almost normal. We have suggested it ourselves.

"And so the restraints fall away. What is left? The belief that it is illegal, unconstitutional and just plain wrong for the state to meet current expenses by borrowing.

Now our reporter has smoked out the unfortunate fact that it's not illegal or unconstitutional. But it's still wrong. Don't do it." ("Even if a deficit budget is legal in Washington state, it's still a bad idea")

The Seattle Times happens to be right on many points. However, they offer no alternative to deficit spending other than one that is completely unacceptable: cut, cut, cut. In a period when the State's revenue could remain depressed for years to come, we must ask ourselves what our priorities are. Will we provide only infrastructure jobs at the expense of education, effectively selling off the future to subsidize the present? We need more federal money for schools and jobs, not one or the other. That money must come from somewhere; a good start would be the enormous military and prison budgets, ending the wars in Iraq and Afghanistan as well as the "war on drugs." Maybe the states should get some of the $700 billion allotted for handouts to the Wall Street firms and people who caused this economic crisis. In any case, state governments across the nation are in need of money to continue providing services and living-wage jobs. They need federal funds immediately. It has been left up to us by our complacent legislators and bureaucrats to put forward a solution that actually works, now and into the future.