Panel discusses state of U.S. economy

By Olesya Minina

Contributing Writer

Six University professors addressed pressing questions of American public policy, economy and the debt ceiling crisis in a panel sponsored by the Bucknell Institute for Public Policy.
The panel took place on Monday, Sept. 26 in Trout Auditorium.

“I thought the panel was both interesting and extremely relavent, given the recent economic turmoil. I enjoyed listening to different facets of the debt crisis from professors of several disciplines and found their presentations to be thorough and throught-provoking,” Maggie O’Brien ’14 said.

Congress and President Barack Obama have been debating raising the federal debt ceiling and reducing future budget deficits for months. The debt ceiling was created after World War II to give the government more economic flexibility, but today it is used as a tool to enact policies that ordinarily would not have the necessary funds within the constraints of the budget, associate professor of political science Scott Meinke said.

The Congressional “super committee” is trying to “produce legislative proposal changes in spending and taxes and must have a package (cut 1.5 trillion in 10 years) to give to Congress by Nov. 23 or automatic spending cuts, that harm both the Democrats and the Republicans, go into effect,” Meinke said.

This committee shows that the United States is in dire need of reform, and decisions need to be made about taxes and spending issues.

John Enyeart, associate professor of history, discussed the history of debt in America. The government needs to stop “following economic wisdom and understand that since the 1950s, GDP has grown but investment is absent and that public spending is crucial for job creation,” he said.

“[The] engines for growth are education and the real problem is a wage crisis, not a debt crisis,” Enyeart said. “We have seen from our past depressions and recessions that income distribution does not have enough consumers and cutting spending does not fit historical reality, and we must invest in jobs.”

Greg Krohn, associate professor of economics, addressed the issue of the federal budget in the long run and pointed out that deficits recently are the highest they have been since 1945. He discussed different budget scenarios and alternative fiscal policies but said projections are highly uncertain since the United States has an aging population and increasing healthcare costs. By examining different sets of data and graphs Krohn said that “maintaining current policy will have a negative conflict and our debt will grow faster than our economy.”

“Healthcare costs are the main driver in increased spending, but the problem is not the growth in public healthcare spending (Medicare/Medicaid) but growth in healthcare overall,” said Amy Wolaver, associate professor of economics.

Wolaver evaluated possibilities of controlling spending and raising the medicare eligibility age.

“We need policies to address system-wide healthcare expenditures and where our priorities are, and what could be the distributional effects,” Wolaver said.

Professor of economics Nancy White examined the different tax revenues and showed that Democrats and Republicans disagree on tax programs. White addressed the possibilities of raising taxes, letting some tax cuts expire and looking at a broader tax base if  the United States wants to decrease preferences, which were over $1 trillion last year.

Chris Ellis, assistant professor of political science, said that there is a broad disconnect within the public because citizens “endorse conservative principles and liberal policies.” The U.S. has vast party polarization and cannot find a common ground on tax increases and program spending cuts, he said.

“The debt discussion panel offered those who attended a glimpse of the economic, historical and social aspects of the debt ceiling debate, something often lacking in American political discourse but something nevertheless important for a proper understanding of the issue,” Jeff Finegan ’14 said.

In addition to offering a broader understanding of these issues, panelists raised questions on the economic and social issues college students need to face as a growing generation that will soon vote on these policies.


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