RESPONSE TO LEN GREANEY
Drawing parallels between how households managed in the '40s and '50s and today is not so simple. My parents also managed on a tight budget – but my father had a number of skills that protected him from loss of income during economic downturns, and was able to go to college on the G.I. bill. My mother managed on a tight budget, but in those days a visit to the doctor or even the hospital was not a financial disaster, even without health insurance, and our school systems provided athletics and music at no cost to families.
It is not true that our government always balanced its budgets in the past. The U.S. government ran a deficit from 1940 to 1946 – this spending more than taxes is what enabled us to recover from the depression and to pay for World War 2. When Mr. Greaney’s mother purchased War Bonds, she was lending the government money and earning a return on the loan, just as today investors, including anyone from individuals to foreign corporations, lend money to the government. The U.S. also ran deficits during much of the early '50s. In other years we ran surpluses which helped to compensate for the years of deficits. Those deficits contributed to significant national economic growth, which also contributed to paying for past deficits. The very large spending on the Iraq war and slow economic growth has greatly complicated this picture.