View From a Height
Commentary from the Mile High City
Tuesday, August 03, 2004

Debt Differences Emerge 

Much has been made of the notion that Bob Schaffer and Pete Coors different primarily in personality and temperment. But in dueling thumbnail sketches in today's Boulder Colorado Daily, some differences emerge on the question of the national debt and the federal deficit.

Here's Coors:

Coors believes the recent Bush administration tax cuts have stimulated the nation's economy, and he favors making those cuts permanent to help U.S. businesses afford to hire more employees.

"There's nothing fundamentally wrong with a deficit," said Coors. "It's not unlike a farmer borrowing money for a tractor or a student borrowing money for a loan. We have about 1.5 million new jobs since last August, and those people are now gainfully employed, all paying taxes and increasing the revenue coming in to the U.S. government. At the same time, I don't believe we can continue to spend at rates higher than the revenue increase, at least on an ongoing basis." (Emphasis added - ed.)

And here's Schaffer:

In 1997, Schaffer introduced the "Balanced Budget Amendment Resolution," or House Joint Resolution 1, which would have required that federal fiscal outlays not exceed receipts and that the limit on public debt not be increased unless approved by three-fifths of Congress.

In 2004, however, the nation is looking at a single-year shortfall of over $400 billion instead of a balanced budget.

Schaffer favors a strategy of cutting federal spending instead of raising taxes to narrow the budget gap, and he favors making the recent Bush administration tax cuts permanent.

"We don't have a balanced budget now because we have people in Washington that like to spend too much money and lack the discipline to put the needs of our taxpayers and children first," said Schaffer. "Saddling America's children with a mounting federal debt is a cruel record of extravagant spending."

Schaffer clearly comes across as a deficit hawk, where Coors, while fiscally conservative, understands that as the national economy grows, so will its debt. The question is, does the deficit grow faster than the economy, and does the debt grow as a fraction of the economy? Both these positions are defensible, although there is some suspicion that our recession was amplified by the attempt to pay down debt. (Nobody really believes that deficits by themselves will drive up interest rates, anymore.)

Coors's problem is that while he may be right, nobody believes him. That is, Colorado is a fiscally conservative state, in the true sense of the word, meaning low spending and low taxes. That Salazar has been calling himself a fiscal conservative when all he wants to do is raise taxes to cover the deficit just shows the power of the idea here. It's the state of TABOR and the Gallagher Amendment, even if it's also the state of Amendment 23. Coors's position may be correct economically, but it's also going to take a lot of voter education to bring people around.

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