A letter by Carl Concel, of Johnstown, “Is nation prepared for economic downturn?” was selected by the editorial board as the best of those that appeared during the week of Sept. 8-14.
His letter was published Sept. 10.
Concel began his letter by explaining that economic growth and contraction periods occur in alternating cycles. He wrote that during the last downturn, “The Great Recession of 2008,” the unemployment rate reached 10%.
“The country overcame the slump primarily by increasing government spending and lowering interest rates to stimulate recovery,” he wrote.
“By 2016, unemployment declined to 4.7%, but the price for boosting the economy resulted in the national debt soaring to $19 trillion from $10 trillion over the same timespan.”
He added that the debt should be reduced during good economic times to strengthen the country’s means to reverse the next slowdown.
“However, our debt has ballooned to $22.5 trillion,” he wrote. “Tax cuts favoring the wealthy and excessive government spending have resulted in a current fiscal year deficit of $960 billion. The next fiscal year’s deficit is projected to exceed $1 trillion.”
While the debt skyrockets, Concel continued, “no substantial improvements have been made to health care costs, infrastructure or other urgent concerns. Moreover, President Donald Trump promised to balance budgets and eliminate the national debt.”
As a result, the means to combat an economic downturn are weaker now than they were 11 years ago, he wrote.
“The debt has climbed 120% since 2008 and is rapidly approaching a level where domestic and foreign creditors will no longer feel safe in lending to America,” he wrote. “Interest rates are historically low, hindering the Federal Reserve Bank’s ways to induce corporation and consumer spending, thereby energizing activity in the marketplace.
“The growing record debt foretells severe and lengthy consequences are very likely during the next economic downturn.”
Note: Selection of the letter of the week is based on writing competency and the ability of the writer to get his or her point across. It is not based on whether the editorial board agrees with the writer’s stance.