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Samir Khosla is a junior majoring in engineering science and a Collegian columnist.
  The Digital Collegian - Published independently by students at Penn State
OPINIONS
[ Thursday, Feb. 3, 1994 ]

My Opinion
A college student's guide to understanding the deficit

The world's staying on track: Another win for the NFC and another loss for Buffalo. Another football season's out. Classes, exams, and . . . politics -- yes, it's a Congressional election year again -- are back in. Fortunately, we will have the Winter Olympics and World Cup Soccer for extra diversions this year.

Continuing with sports and politics in the same breath, here's a neat way to depict the federal budget deficit: Picture Beaver Stadium with its 100,000 crazy fans; now give each fan a Beaver Stadium of his or her own; fill all these 100,000 Beaver Stadiums to capacity; ask everyone to contribute his/her share toward the deficit (a penny -- we are talking college students here) and we'll end up with a 100 million bucks. Quite a lot you may think -- but that's less than half of 0.1 percent of the projected federal deficit for this year!

So, yes -- the deficit's big. And we as young people must be especially concerned. Anyone who's ever run up credit card debt knows about how something as innocuous-sounding as "Compound Interest" can grow into quite a monster -- by the prime earning years of our lives, tax rates would be sky high!

There is just no way to keep up our basic standards of living (decent roads, schools, prisons and so forth) while having much of the tax revenue go toward making interest payments. Some say the situation is already out of hand, but there actually is still hope.

In 1992, Ross Perot did bring national attention to the issue, and credit should be given to him for this. But he also prescribed a harsh remedy -- a 50 cent tax on gasoline -- that proved too bitter for recession-plagued America. Yet, despite the further handicap of not having a Congressional bloc that would support his reforms, he captured one in every five votes.

So, at least some Americans are willing to face up to the problem. But, instead of voting for Perot's quick fix, more voters opted for some weaker promises and a feeling of renewal from the Governor whose hometown was aptly called Hope. Of course, votes aren't decided on just one issue. With Perot's previously-mentioned shortcomings and Clinton's strength on other domestic issues, one might suppose that a more complete "deficit-hawk" could have done even better than Perot.

This brings us to to the dilemma that most Congressional candidates face this year. Is it or isn't it yet time to proclaim oneself a deficit hawk? Recall that the latest Congress had an unprecedented 100 "freshmen" members. Many of them were indeed elected on the promise that they would seriously examine all federal spending and find ways to cut the deficit without raising taxes . . . much (SHHH!).

But, we all know the last two income tax increases (1990 and 1993) have been rather meek. The "middle-class" (income between $15,000 and $85,000 for a couple "filing jointly") has seen its tax rate held stable at 28 percent, which was prescribed in the Reagan era. I am sorry but raising taxes on the top 2 percent of the population isn't going to raise anything like 20 bucks for each person in an arena of 100,000 Beaver Stadiums.

Of course, the 1993 Clinton plan did include a 4.3 cent gas tax increase -- the only tax hike affecting the general populace. Even this small increase was much protested and by the time the deficit-reduction bill passed, the media had decided that Clinton had let down the American people by asking them for a dime-a-day more at the gas station.

To get some of the last-minute freshmen Congressional votes for this bill, Clinton promised to look into further cuts by the end of last year's session. So, U.S. Congressmen Tim Penny (D-MN) and John Kasich (R-OH) co-drafted a bill late last year that would have raised $200 billion in new taxes and cut $90 billion in spending. But established Congressmen killed the bill before it was even up for vote.

Despite such setbacks, we young people must remember the deficit should be our number one issue. Interest payments already consume over $200 billion of the $1.4 trillion federal budget. The percentage of money being spent on interest will probably increase to 25 percent before the end of this decade. It's simply scary to speculate on the taxing and spending decisions that will have to be made.

We can't allow ourselves to remain victims of the baby-boomers' spending excesses. Be sure to watch for this years' candidates positions on the deficit. Try to do your part on raising awareness of this issue in general.

One of the best organizations truly facing up to the issue is the Concord Coalition. It is a non-partisan group co-founded by ex-Congressman Warren Rudman, who quit Congress after it blatantly ignored his deficit-reduction law (does Gramm-Rudman limitations ring a bell?), and by Paul Tsongas. The Coalition has a sound plan to eliminate the deficit by the year 2,000.

Another good political action group is "Lead or Leave", an organization of students and twenty-somethings trying to pressure Congressmen into seriously reducing the deficit. I strongly recommend you try to learn more about these and other grass-roots organization in this election year.

Meanwhile, let the "Games" begin.

 

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