The Edmond Sun

Opinion

January 4, 2013

BY THE NUMBERS: Let’s solve today’s problems first

EDMOND — In the end Congress did most of what it needed to do to stave off a recession (probably) for now. For some reason though, there are those walking the halls of Congress intent on making sure that a recession comes this year.

In the waning hours of the 112th Congress, the House of Representatives approved a compromise bill hammered about in the U.S. Senate helping taxpayers avert a significant income tax increase. The measure, which has since been signed by President Obama, will permanently extend the Bush income tax cuts for 98 percent of Americans while postponing mandatory spending cuts for another two months. Those income tax cuts were slated to expire on Jan. 1 unless Congress acted. While the measure had overwhelming bipartisan support in the U.S. Senate, the measure only passed the House due to support from House Democrats as most House Republicans opposed the deal including local Congressman James Lankford.

Interestingly, it took House Democrats, a Democrat-controlled Senate and a Democrat President to pass legislation averting a massive tax increase.

Of course, tax cuts aren’t free. According to the Congressional Budget Office the law will increase the national debt by nearly $4 trillion in the next 10 years, mostly from extending the 2001 and 2003 tax cuts. There is some additional spending in the law, mostly for extended unemployment insurance payments (which Congress typically extends during periods of high unemployment like today) and the extension of several tax credits (which count not as a tax cut but as a spending increase). However, the bulk of the impact on the debt comes from the tax cuts.

Of course, eventually Congress must find ways to reduce our debt as a trillion dollar annual deficit is not sustainable. Since during the last few years, in response to the economic crisis and terrorist threats, government spending has risen, it is reasonable for government spending to decline eventually. Furthermore, since during the last few years taxes have been at their lowest rate (as a percentage of the economy) in 50 years, it is also reasonable that taxes eventually will have to rise. Finally, since in the long-run Medicare and Social Security spending will far outpace revenues, it is reasonable that these two entitlement programs eventually will need to be reformed.

These things must happen eventually. And the quicker we start planning for these the better. But while our growing national debt is a concern, it is not our most pressing economic concern — unemployment is.

According to figures released by the U.S. Bureau of Labor Statistics this week, the U.S. unemployment rate ended the year at 7.8 percent. While this is much better than the 10.0 percent unemployment rate registered in 2009 at the worst of the Great Recession, it is still not low enough. While the economy has added 5.3 million private-sector jobs the last 34 months, too many Americans still cannot find the job they need. While the economy continues to recover, it has still not fully recovered.

We could, if we wanted, balance the federal budget next year. The solution requires simple arithmetic — we just need to raise taxes and cut government spending. However, economic science tells us (and historical evidence shows us) that both of these actions will contract the economy and make unemployment worse. In short, solving our long-term debt problem exacerbates short-term unemployment problem.

In short, with 7.8 percent unemployment now is not the time to raise taxes on anyone or to cut any government spending.

Instead of trying to solve our debt problem this year, Congress should focus on reducing unemployment first. We know what needs to be done. According to independent forecasting firms, if Congress had passed President Obama’s American Jobs Act last year, one million fewer people would be unemployed today. Yes, it would have required a short-term increase in our national debt to address this problem but it would make a significant difference in the health of our economy and the happiness of our families. In a few years once our economy returns to firmer footing, we can then turn our attention to solving our long-term problems.

In arguing for his preferred economic policy, Congressman Lankford often has said, “Washington does not have a revenue problem, it has a spending problem.” It’s obvious though, that right now America has an unemployment problem. So, here’s a novel idea for Congress — let’s solve today’s problem first.

MICKEY HEPNER is the dean of the College of Business Administration at the University of Central Oklahoma. Hepner serves on the Executive Committee of the Board of Directors for The Oklahoma Academy.

1
Text Only
Opinion
  • Medicaid reform a necessity

    Historically, education spending by the state of Oklahoma has been the largest budget item. This is no longer the case. In recent years, the state of Oklahoma spends more on Medicaid (operated by the Oklahoma Health Care Authority) than common education and higher education combined, according to the state’s Comprehensive Annual Financial Report.

    July 25, 2014

  • Remembering lessons from 1974

    This week marks the 40th anniversary of an important milestone in America’s constitutional history. On July 24, 1974, the Supreme Court voted 8-0 to order the Nixon White House to turn over audiotapes that would prove the president and his close aides were guilty of criminal violations. This ruling established with crystal clarity that the executive branch could not hide behind the shield of executive privilege to protect itself from the consequences of illegal behavior. It was a triumph for the continued vitality of our constitutional form of government.

    July 25, 2014

  • RedBlueAmerica: Is parenting being criminalized in America?

    Debra Harrell was arrested recently after the McDonald’s employee let her daughter spend the day playing in a nearby park while she worked her shift. The South Carolina woman says her daughter had a cell phone in case of danger, and critics say that children once were given the independence to spend a few unsupervised hours in a park.
    Is it a crime to parent “free-range” kids? Does Harrell deserve her problems? Joel Mathis and Ben Boychuk, the RedBlueAmerica columnists, debate the issue.

    July 24, 2014

  • Technology that will stimulate journalism’s future is now here

    To say technology has changed the newspaper media industry is understating the obvious. While much discussion focuses on how we read the news, technology is changing the way we report the news. The image of a reporter showing up to a scene with a pen and a pad is iconic but lost to the vestiges of time.
    I am asked frequently about the future of newspapers and, in particular, what does a successful future look like. For journalists, to be successful is to command multiple technologies and share news with readers in new and exciting ways.

    July 23, 2014

  • New Orleans features its own “Running of the Bulls”

    On July12, the streets of the Warehouse District of New Orleans were filled with thousands of young men who were seeking to avoid being hit with plastic bats wielded by women on roller skates as part of the annual “Running of the Bulls” that takes place in New Orleans.
    The event is based on the “Running of the Bulls” that occurs in Pamplona, Spain, that is  part of an annual occurrence in which a group of bulls rampage through the streets of Pamplona while men run from them to avoid being gored by their sharp horns. That event was introduced to the English-speaking world by Ernest Hemingway, who included scenes from it in his critically acclaimed 1926 novel “The Sun also Rises.”

    July 22, 2014

  • OTHER VIEW: Newsday: Lapses on deadly diseases demand explanation

    When we heard that the federal Centers for Disease Control and Prevention had created a potentially lethal safety risk by improperly sending deadly pathogens — like anthrax — to other laboratories around the country, our first reaction was disbelief.

    July 22, 2014

  • Holding government accountable for open meeting violations

    A few weeks ago I wrote about the recent success of three important government transparency proposals which will go into law this year.

    July 21, 2014

  • GUEST OPINION — Oklahoma GOP voters want educational choices

    A Braun Research survey released in January showed that Oklahoma voters — Republicans, Democrats, and Independents alike — favor parental choice in education.

    July 21, 2014

  • HEY HINK: IRS interferes with citizens’ rights of free speech

    The patient is gravely ill. We have detected traces of a deadly venom in the bloodstream. We don’t know how widespread the poison is, but we know, if not counteracted, toxins of this kind can rot the patient’s vital organs and could ultimately prove fatal.

    July 19, 2014

  • 130408_NT_BEA_good kids We're raising a generation of timid kids

    A week ago, a woman was charged with leaving her child in the car while she went into a store. Her 11-year-old child. This week, a woman was arrested for allowing her 9-year-old daughter to go to the park alone. Which raises just one question: America, what the heck is wrong with you?

    July 17, 2014 1 Photo

Poll

If the Republican runoff for the 5th District congressional seat were today, which candidate would you vote for?

Patrice Douglas
Steve Russell
Undecided
     View Results