Letter to the Editor: Don’t blame only federal spending

The Commentary titled, “Federal spending has gone wild,” (Dec. 30) by Dr. John Stapleford was mostly a list of features of our economy, which included a focus on government spending and growing debt. Stapleford’s essay really involves economics, banking and finance. I attempted, in my retirement, to better understand these things by reading some three dozen books on these subjects. I actually learned some things, and I would like to share some of them with Delaware State News readers.

First, it is not just federal spending that has gone wild. The debts of private citizens (e.g., for car, home and credit card financing), nonfinancial services, private corporations (e.g., Main Street) and financial services corporations (i.e., Wall Street) have all also increased recently about as much as that for the federal government. And it’s not just in the USA.

Second, it is frequently said that the government “prints” money whenever it is wanted and that this is a bad thing. But corporations “print” bonds and stock shares all the time when they want money, and people and other corporations readily buy these financing products without any worry, unless an economy starts cratering. Then, everyone runs for shelter.

Third, a word about “stimulus packages.” It sounds like Stapleford doesn’t like them. I think maybe we should recognize that, in recent decades, more and more governments in the world have tried to “regulate” their economies to stabilize them. All over the world there have been at least some dozen or more economic crises in the last two decades. Some were localized; some were multinational. There was always some government action to help the situation from getting worse, and opinions afterward were sometimes controversial about how successful these actions were. Figures I have seen for China say its total debt is much worse than that for the USA, and yet, financial media whips are all estimating that in as little as eight years from now China will have the largest economy and the largest reserve currency.

Books will help you understand “the system.” But don’t read the textbooks. Read books by “whistleblowers” or people who found things out the hard way. One in particular is easy to read and is titled, “Lost Prophets,” by Alfred L. Malabre Jr., former economics editor for 25 years at The Wall Street Journal. He found that reality did not always follow what the economists predicted. And remember Enron? Not all bad things come only from the government. Lots of other private corporations, in past decades, did bad things, too. Books on criminology will have chapters on the history of corporate crime going back many decades.

Arthur E. Sowers