Deadline Now: Author James McTevia
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Deadline Now: Author James McTevia

Friday, November 4, 2011

As one of the foremost pioneers of what has become a growth industry in America -- turnaround management and the liquidation of failed companies -- James V. McTevia has seen the ravages of debt in virtually every form.

His new book is "The Culture of Debt: How a Once-Proud Society Mortgaged Its Future." In it, McTevia outlines how the United States' enormous debt is leading the nation toward the edge of cliff.

On the web:

Here are Jack Lessenberry's Final Thoughts for this edition of Deadline Now:

How much is too much?

That is the question. About a lot of things, but certainly about our national debt.  I am not an economist, thought I have studied economics, in college and elsewhere.  But even Nobel-Prize winning economists disagree on the extent governments should go in debt.

There are, indeed, many examples through history of governments brought low by debt. I covered some of them as a reporter in the 1980s, but there was a difference.

Back then, insolvent nations could be, and were, often bailed out by a combination of the International Monetary Fund, the World Bank and the United States of America. If we ever have to default, it’s not at all clear that anyone will be around to rescue us.

I am not sure that I agree with Jim McTevia completely. There is considerable evidence that deficit spending is sometimes necessary, at least in the short run. During World War II, this country ran up enormous deficits, which contributed not only to winning the war, but to our economy returning to full employment for the first time since before the Great Depression. There is also considerable evidence that Romania badly damaged its economy in the 1980s by insisting on attempting to wipe out its entire debt too quickly.

However, it is hard not to be frightened by what’s happening in this country now, and as Mr. McTevia notes, anyone who blames only one political party is a fool. It is clear that few politicians have the courage to ask us to make painful, but necessary decisions.

To my mind, that includes cuts in social programs but also in defense boondoggles. If there is something radically wrong with borrowing billions from China to sustain frivolous consumption, it is also wrong to continue to give tax breaks to millionaires, who are paying a far lower rate than in earlier decades.

Common sense trumps ideology.

Nearly a century ago, the irreverent journalist H.L. Mencken said democracy was the theory that the common people know what they want -- and deserve to get it --good and hard.

It’s hard to see how we can avoid getting it very hard without a little more fiscal discipline.