Newswise — As the nation watches the countdown to Aug. 2 — the date when the U.S. Treasury Department has said it will no longer be able to pay all its bills unless Congress resolves the impasse over raising the $14.3 trillion debt ceiling — Florida State University’s nationally regarded experts in economics and political science are available to answer media questions. They can provide analysis of the continuing debt ceiling negotiations and the potential ramifications of the nation’s fiscal health problems.
ECONOMIC RAMIFICATIONS
James D. Gwartney, FSU’s Gus A. Stavros Eminent Scholar and a professor of economics, as well as director of the Gus A. Stavros Center for Economic Education and Free Enterprise: (850) 907-3326 (home) or (850) 644-7645 (office); [email protected]
Gwartney is an expert on such issues as taxation, labor policy and the economic analysis of government. His work on economic freedom and economic growth has been acclaimed throughout the world. Gwartney also is a coauthor of “Economics: Private and Public Choice,” a widely used principles-of-economics text that is now in its 13th edition.
“The issue is more about the path of government spending than the debt itself,” Gwartney said. “Those who want merely to raise the debt ceiling believe more spending will help promote recovery. Those who oppose the increase believe the growth of government is why the recovery is so sluggish. Thus, there is not much room for compromise.
“Americans should learn from Japan and Canada,” Gwartney said. “Japan responded to a recession in 1990 with increases in government spending financed by debt, and the result was a lost decade. Canada responded to a similar debt crisis in the late 1990s by reducing government spending and shifting the federal budget toward a surplus for more than a decade. The result was the fastest growth among the G-7 nations.”
Milton H. Marquis, professor of economics: (850) 645-1526; [email protected]
Marquis’ principal areas of research are monetary and macroeconomic theory and policy. He has authored two textbooks on monetary theory and policy and the financial markets. In addition to his career in academia, Marquis has worked for the Federal Reserve in Washington (1993-1995) and San Francisco (2000-2003), where he was primarily responsible for monitoring developments in the financial markets and providing briefings to policymakers.
“The current fiscal problem,” Marquis said, “is not the existence of federal debt, which plays an important role in the world’s financial markets, but the fact that the level of debt relative to the size of our economy is too high and growing. However, the remedy for the current debt problem should not include a rigid constitutional amendment requiring a balanced federal budget that would cap government debt at its current level.”
STATE AND LOCAL CONSEQUENCESCarol Weissert, FSU’s LeRoy Collins Eminent Scholar and a professor of political science, as well as director of the LeRoy Collins Institute: [email protected] (best way to reach); (850) 644-1441 (office), (850) 321-4791 (cell)
Weissert teaches American politics and elections. Her research interests include state politics, intergovernmental relations and federalism, and health policy. She can discuss the implications of partisanship on congressional budgetary decision making and the possible effects on state and local governments.
“States and localities may be the entities most adversely affected by budgetary stalemates, spending cuts, and efforts to balance the budget,” Weissert said. “Likely to be protected in the budget deal are programs for individuals such as Social Security and Medicare. Likely to be cut is Medicaid — a massive federal-state health care program that provides a vital safety net for the poor. Also likely to be cut are grants to states in areas ranging from education to transportation. All this at a time when the states and localities are already facing their own revenue problems, spending demands and loss of federal stimulus dollars. It is not a pretty picture.”
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