No quick-fix solution for U.S. deficit problem

President Clinton and Congress are fishing for a solution to the federal deficit. But after four years, they have only a marlin's skeleton to show for their work.

During those years the government has been trolling the issue through waters, the flesh being ripped from each of the political parties' proposals. Both parties want to balance the budget, but they are attacking each other over which federal programs to slash.

The government's quest for a solution focuses on how to eliminate the "policy deficit" -- the difference between the tax revenue and programs.

However, Atlee believes this is only one-third of the deficit problem.

Atlee said he has fleshed out a way to help the economy before budget problems occur. It has to do with the "twin deficits" -- the policy deficit and the "HI-unemployment" deficit -- this nation faces.

Congress controls the policy deficit with its tax and spending policies. For example, the payroll tax people pay now is used to fund the Social Security program. The balanced budget amendment would be concerned with this deficit, Atlee said.

The Federal Reserve somewhat controls how quickly or slowly the economy grows by controlling the interest rates and the money supply. Since 1978, the Reserve declared that a healthy unemployment rate was 6 percent.

State College has a 3.1 percent unemployment rate -- the lowest in the state, according to the Bureau of Research and Statistics Pennsylvania Job Center.

In 1978, the Reserve said if it fixed the unemployment rate at 4 percent, it would help solve the deficit problem before it occurred.

"If you reduce unemployment by just 1 percent each year, you would automatically change the ('HI-unemployment deficit') by . . . $60 billion," Atlee said.

"There are a lot of theories out there," he said. "You just have to look at the realities."

Some argue that one of those realities regarding a low unemployment rate is inflation.

"As the economy gets stronger, workers get pickier at the jobs they choose and the wages they accept. This increases the price of the products, or so the argument goes," said Mike Schuyler, an economist at the Institute for Research on the Economics of Taxation in Washington, D.C.

Though having a robust economy would fix the deficit, Schuyler said, the problem is getting there.

"It's like pouring salt on a bird's tail in order to catch it," he said. "If you do it, you're close enough to catch it."

Not many people have been able to catch those unemployment rates. In 1979, the oil-exporting countries levied harsh taxes, and the Reserve did not counter the effect by controlling interest rates. This would, in turn, affect the unemployment rate. Since then, Atlee said 13 million people are now "wholly or partly unemployed."

But Paige is still skeptical of the plan.

"No matter what you say about any of these theories it all comes down to the national debt -- the debt that taxpayers are paying taxes just on the interest," he said. "We have to balance the budget; it can be done."