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JOHN BALZAR

Imminent Threat to Our Security

No, it's not Iraq. It's the economy. And we're not stupid.

October 06, 2002|JOHN BALZAR

I was stopped cold the other day when reading about threats to homeland security. A writer with better credentials than mine suggested that Herbert Hoover was more of an economic activist than George W. Bush. No need to debate the point. Merely that you could debate it should be enough to scare us good.

Hoover, let's recall, was the original "trickle down," business-knows-best president. With the economy in trouble and the stock market over-inflated back in 1929, he resolutely voiced confidence in the status quo, offering assistance to industry and counting on wealth to trickle down to working people. The result was the Great Depression, and it lasted 11 years.

Today, all eyes are turned to the confrontation with Iraq.

Let me join those who think we ought to be equally engaged in defending our livelihoods at home. Partisanship aside, our hopes and well-being depend as much on economic stability as on overcoming tyranny in the Mideast. If the doves are wrong about Saddam Hussein, experts say we still have months or years of leeway. But if the laissez-faire crowd is wrong about the economy, we may not.

As Hoover discovered--and remember, he was for a time popularly regarded as "an extremely competent leader"--there comes a point when it's too late to act. Sometimes busts become unstoppable chain reactions.

Are we approaching the point of no return this time? I can speak with authority as one of the 200 million or so American consumers on whose shoulders this whole shaky economy has been resting for a couple of years now. The unsettling news is taking a toll: A new report shows cracks in the housing bubble. Poverty is once again on the rise. Median family income has fallen two years consecutively. One family in 10 is behind in paying its bills. Health insurance premiums are forecast to rise 15% in the next 12 months, and the uninsured are growing in numbers. Who can bear looking at this autumn's 401(k) statements? Every estimate of federal debt grows chillingly larger and clearly undermines the long-term promises of Social Security. State and municipal governments are whacking into the bone on everything from school financing to emergency-room facilities.

If the fundamentals of our economy are sound, as the president insists, why does this drumbeat of bread-and-butter financial news, month after month, leave so many of us with an awful feeling in our stomachs?

Setting aside the interesting question of what new policies the government should pursue, shouldn't we at least be airing our options with the same vigor that we're discussing plans for Iraq's invasion?

Everybody in Washington is now a copy editor--an expert on shades of meaning in words written in resolutions meant to bring Hussein to his senses or to his knees. The economic debate, by contrast, is vague, partisan and secondary. Al Gore was correct, if belated, in saying that second place is no place to relegate the economy.

The president has advanced three planks to get us on the road to prosperity: restoring confidence in the free-enterprise system, restraint in federal spending and top-heavy tax cuts. I, for one, am not reassured, and I'm getting less so by the week.

Disclosures of corporate and Wall Street misfeasance continue to outpace the efforts of understaffed regulators and compromised members of Congress to rouse themselves in response. As for holding the line on government spending, the staggering cost of waging war on the other side of the world more or less renders that possibility moot, don't you think?

Which leaves the upcoming phase-in of income tax cuts. Among the ever-changing rationales advanced for this idea (remember, originally it was to hold down the growth of government by giving back a Treasury surplus), we are now told that it will eventually fuel investments to keep the country moving. And here's where the ghost of Herbert Hoover rises from the ashes. It was just this kind of tentative pump-priming that didn't work 73 years ago in the face of bad news.

In answer to the inattention in Washington, our family is doing the only thing it can. We're cutting back. I see that friends are too. One tells me that his relatives are proposing a suspension of gift exchanges over the holidays. We all recognize that what we're doing will make things worse. But it seems a fair time to ask: Why aren't the people entrusted with leadership doing more to make things better, in the name of homeland security?

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