PUTTING THE DEFICIT IN PERSPECTIVE
Robert Kuttner's article "Don't worry so much about the budget deficit" (Economic Viewpoint, July 6) overstates the importance of the savings and loan bailout in this year's federal budget picture. Actual outlays for the Resolution Trust Corp. and other deposit insurance in the first eight months of the fiscal year (from the Monthly Treasury Statement through May 31, 1992) were just under $8 billion--a far cry from the $70 billion the article cites as likely for the year as a whole.
It may come as a surprise that the RTC alone ran a small surplus of $417 million during the eight months, as the proceeds of asset sales exceeded new expenditures. The eight-month federal deficit, excluding the cost of the thrift bailout, was a sturdy $224 billion.
I have no argument with the notion that a panicky solution to reduce the deficit could cause considerable harm. The gradual solution we might hope for, however, should address the fact that spending for entitlements seems out of control: The Administration has estimated that such outlays will rise by 22% this year.
C. Heather Dillenbeck
U.S. Trust Co.
Kudos to Robert Kuttner for challenging the unwarranted public notion that continued federal budget deficits will precipitate eventual economic ruin. So long as the budget deficit continues trending downward in proportion to the economy, our national debt will follow suit. That's what really counts. The real tragedy of our fixation on a balanced federal budget is that it diverts our attention from the true source of our anger: pervasive waste, inefficiency, and ineffectiveness built into our current system of government.
David B. Pollock
I am very happy that Robert Kuttner does not balance my checking account. I wonder how he balances his own.
National City, Calif.