Time Bomb

I was delighted to find in the Fall 2011 issue the admirable account of the debt troubles caused by Uncle Sam’s fiscal recklessness (“Our National ‘Time Bomb’”).

Were the article published by any institution other than UVA, I’d not be moved to remark on it. But given that it appears in Virginia Magazine, I’m obliged to pick a nit.

The article says, “Last fall [Peter G.] Peterson was awarded a Thomas Jefferson Foundation medal, the University’s highest external honor, for his role in addressing the nation’s fiscal situation.” Mr. Peterson has indeed long highlighted the problem of America’s growing public debt, but well before he entered the scene, a UVA economist almost single-handedly revolutionized our thinking about deficit financing.

Prof. James M. Buchanan, who served on UVA’s faculty from 1956 to 1968, wrote in 1958 a book titled Public Principles of Public Debt. Before its publication, the near-unanimous opinion of scholars, pundits and policymakers was that even very large government debt imposes only very small burdens—and burdens only of a secondary order. Deficit financing of government spending, therefore, wasn’t much of a problem. Buchanan vividly exposed the flawed assumptions and sloppy reasoning that produced this consensus.

While some people still cling to the notion of government debt being harmless, Jim Buchanan’s little book built the intellectual ground upon which today stand Mr. Peterson and other deficit hawks.

Donald J. Boudreaux (Law ‘92)
Burke, Va.

 

In its focus on federal spending, the discussion of the national debt in “Our National ‘Time Bomb’” left out a meaningful discussion of the other side of the ledger. As the article notes, “tax revenues shrank” in response to the recent recession. However, conspicuously absent was any mention of the tax cuts of 2001 and 2003, which the Washington Post has estimated, based on Congressional Budget Office figures, to reduce revenues by more than $1 trillion over 10 years. As we contemplate long-term fixes to the national debt, we should remember that at least some of our current budget difficulties are due to policy choices made by our elected representatives.

Katie Boyle (Col ‘03, Grad ‘04)
Arlington, Va.

 

After the rancorous and generally disgusting debate in Washington over the last couple of months regarding the national debt, I was excited to see that the fall issue included an article on that very subject. The debate in Washington was characterized primarily by ideology, with little reliance on fact, reason or analysis. I thought that an article in Virginia Magazine would do a better job, but I was disappointed. 

My chief complaint is there is not a single word about the tax cuts enacted during the Bush administration. Estimates put the cost of those cuts over the last decade from $1.7 trillion to $2.9 trillion. Combine the impact of those tax cuts, along with the further loss of revenue due to the economic downturn, and you start to have a sense for why deficits are so large. It is not because federal spending on general government programs has run rampant.

In 2009, federal tax revenue as a percentage of GDP was at its lowest level since 1950. Before you can solve a problem, you must first understand its origins. Your article did not do a very good job of helping us do so.

Thor Strong (Col ‘74)
Okemos, Mich.

 

I enjoyed “Our National ‘Time Bomb’” and believe that a follow-up with additional depth would be beneficial.

The U.S. economy started its decline in the 1970s. For 15 or 20 years, middle-income American families maintained their economic footing because wives moved into the workforce. Since about 1990, the impact of two wage earners has been neutralized by the continued replacement of middle income jobs (with benefits) by lower-income jobs (without benefits). The cost of living and the cost of competing in the “new” economy continue to increase, causing a dramatic squeeze on people of middle-income. At the same time, consolidation of business and the rise of Wall Street trading profits has rewarded the few handsomely.

This is a long way of saying that the rich are richer and that there are more people on the margin. Unfortunately, I see nothing on the horizon that will change this destructive trend. I believe that deficit spending in good years and the accumulation of $14 trillion in national debt is the cost of Washington pretending that the U.S. economy remained the powerhouse that it was in the two decades ending in 1970. I am extremely concerned about the future of the United States, and I have not even touched on the impact of a switch in the globe’s reserve currency.

David Church (Grad ‘85)
Moorestown, N.J.

 

I was shocked and outraged to read the ravings of anti-Social Security oligarch Peter Peterson in the Fall 2011 edition of Virginia Magazine (“Our National ‘Time Bomb’”). All the usual Peterson misleading arguments were presented without any attempt at balance by your authors. Also not presented was Peterson’s history as President Nixon’s Secretary of Commerce, CEO of now-defunct Lehman Bros, founder of the Wall Street firm Blackstone Group, and longtime anti-Social Security activist. Among the article’s errors and misleading statements, the notion that the Peterson Foundation is nonpartisan is the most outrageous. Peterson and his foundation(s) have long been known for their agenda of privatizing Social Security and eliminating Medicare. In any event, there was no mention in your article of the simple expedient of raising the income subject to Social Security tax, an expedient which would have the effect of eliminating the funding gap in Social Security benefits anticipated 30 years from now, and which is supported by 85 percent of Americans.

The erroneous claim that Social Security contributes in any way to today’s deficit has been disproved so often and so conclusively that failing to include mention of the actual state of affairs regarding Social Security calls into question any conclusion or claim of fact in any part of your article. The 2011 report of the Social Security trustees is as good a place to start with the refutation as any, as would be a brief perusal of Dean Baker’s Social Security: The Phony Crisis.

The most overt error in the article was the graphic claiming that U.S. defense expenditures account for only 20 percent of America’s spending. The 20 percent claim for defense expenditures represents but one half of all defense spending. Your authors fail to note the other half of defense expenditures.

Also, the article glosses over the impact of lower current tax revenues (as a result of the recession) and the degree to which that has impacted the deficit, choosing instead to focus on spending, as if we could cut our way to prosperity.

America’s current financial situation is complex, more closely resembling a depression than a recession. Because it is a debt-based depression, righting the economic ship will take longer than in a purely bubble-based recession.

Under the guise of informing “citizens,” your uncritical, biased, unsound, opaque homage to Peterson is by far the most repulsive, anti-citizen collection of disinformation I’ve ever seen in Virginia Magazine.

Dwight Hamner (Col ‘73)
San Mateo, Calif.


Inside the Pavilions

I enjoyed reading the articles on the pavilion residents in Virginia Magazine (“At Home in History,” Fall 2011). I was very surprised, however, to learn about the low rents charged to the residents, between $1,100 and $1,800 per month for an entire furnished pavilion. I assume the residents also have free parking nearby. By comparison, UVA students are charged $600 per month for a single small room on the Lawn, or for a room in a multiple occupancy dorm or for a bed in a double room.

Faculty and staff are charged about $1,200 per month for unfurnished Piedmont family housing (electricity not included), whose quality and convenience is certainly not on par with our beautifully maintained, historic pavilions.

I wonder if the low pavilion rents are an untaxed “perk” for the residents. It would seem more appropriate to charge market-level rates in times of dwindling resources and rising tuition.

Giorgio Carta
UVA professor, chemical engineering
Charlottesville, Va.

While pavilion residents certainly enjoy their historic location, the other perks come at a cost. They pay full price for parking, supply their own furniture and are taxed on a portion of the difference between rent and market value. Because residents host numerous public events in the pavilions, they incur significant additional expenses, including the costs of food, cleaning after events and providing most furnishings for the public areas. —Ed.

 

In the spring of 1951, Allan Wimbish (Col ‘51, Law ‘55) and I, who resided at 30 East Lawn, found that the door to Pavilion VIII near the bathroom under 30 East Lawn housed a kitchen with a lot of junk in it. There was a bathroom indoors, so we went to the housing authority and asked if we cleaned up that room, could we live in it the following year.

We cleaned out the basement, making two rooms available, and we chose the room that was once a kitchen as it had a direct outside door and one also could reach it from the Lawn through the main door of Pavilion VIII. We resided there for the school year 1951-52; Allan went off to war and I continued to room there in 1952-53. Thus, I had the pleasure of living on the Lawn for the three years that I was in law school. I think we were the first nonprofessors ever to live in Pavilion VIII.

Robert G. Doumar (Col ‘51, Law ‘53, ‘88)
Norfolk, Va.


Children With Disorders

We enjoyed “Raising Children” (Fall 2011) but find it necessary to point out that the scenarios are written for children following a “normal” path of development. Given the significant increase in the number of children diagnosed with developmental disorders, in particular autism, we’re disappointed that the article did not comment with any specificity as to what parents can do when they realize their child is not mastering age-appropriate skills. In these situations, it’s a little more complicated than picking the latest bestseller on parenting and making it fit your child with special needs. We wish the article had encouraged parents who suspect their child is developing differently to seek professional advice, because it is well established that early intervention helps children with disabilities to reach their full potential. We would also like to see this publication cover the work being done by professors and alumni who are doing research and building resources for children with disabilities.

Kristina Schoof Vacha (Col ‘95)
Mark Vacha (Law ‘96)
Media, Pa.


Thanking Leonard

In May 1979, when I was a just-graduated history major with no desire to leave Charlottesville, Leonard Sandridge hired me as his assistant after he was promoted to director of the Budget Office.

To this day, long after I left that position, he remains one of the best people with whom I have ever worked. He is a man of extraordinary integrity and his dedication to the University of Virginia is unequaled. I was so delighted to read the tribute to him in the Fall 2011 magazine (“Thank You, Leonard”). I simply want to echo what so many others said about him—every graduate of this University owes a debt to Sandridge for his leadership, stewardship of the University’s fiscal health and his lifelong devotion to the educational enterprise that is our alma mater. He is true to the “last words” he might choose for himself: He is honest, he worked hard, and he cares about everyone one of us who love the University of Virginia and we are the better for it.

Mary J. Davis (Col ‘79)
Lexington, Ky.


Jefferson’s Gift

Reading “Off the Page and Onto the Screen” and “What’s the future of books in a digital world?” (Fall 2011) sparked a thought on an article I had just finished in the September 2011 issue of Popular Science. The article discusses the future of classrooms versus the Internet, student/teacher interaction and how students actually learn new material and concepts.

The article quotes Mr. Jefferson on higher education’s function: “enlighten them with mathematical and physical sciences, which advance the arts, and administer to the health, the subsistence, and comforts of human life but also form them to habits of reflection and correct action, rendering them examples of virtue to others, and of happiness within themselves.”

I believe Mr. Jefferson’s gift to us, the University of Virginia, will be needed for a long, long time, even if the texts are digital.

Robert Humphris (Col ‘84)
Charlottesville, Va.


Faculty Retention

In the interview with President Sullivan (“The State of the University,” Summer 2011) no one noticed, apparently, the irony of putting her answers to the question about faculty hiring and retention immediately before her answer to the question of coaches’ salaries.

Her justification of the coaches’ astronomic salaries is: You have to pay to play, because it is a competitive environment. If you want to be a top-notch competitor in collegiate sports, you have to pay good salaries. I agree with this logic. But academic salaries are competitive, too, and money talks. Faculty in my department—I believe across Arts & Sciences—have not had a raise since 2007. Retiring faculty have not been replaced. A number of us, as President Sullivan points out, have been made offers by outside institutions, and we have had to make hard decisions about whether UVA would remain the wonderful place that it has been. As the economy begins to improve, those offers will become more frequent, more attractive and less frequently refused.

It would be wonderful if the University could find a way to marshal alumni to support faculty salaries the way they do coaches salaries. It would remind everyone that (a) sports are ancillary to academics at the University, and (b) academics have consistently been the place of UVA’s excellence.

President Sullivan has been a terrific new presence here and we all are quite hopeful about the direction of the University under her leadership. But for all her capacities, she is one person. This is an institutional and structural challenge, and cannot be met without the vigorous engagement of alumni and friends.

Charles Mathewes
UVA professor, religious studies
Charlottesville, Va.


Remember the Peonies

As an elderly former “faculty child,” I always read the “In Memoriam” section of Virginia Magazine. Under 1940s, I found the name of Robert Septimus Pace Jr.

My late mother, Dorothy Chamberlain Johnson, wife of Thomas Cary Johnson Jr., professor of history at UVA for many years, got to know Mr. Pace when she lived in Fluvanna County after my father’s death. She was a strong supporter of the Fluvanna County SPCA. She and Mr. Pace shared many interests: reading, gardening, historical preservation and a love of animals.

Ill health forced her to move north and live with me. When she died, Mr. Pace wrote me a letter suggesting that I send her ashes to him “for placement in one of my flower beds.” Since she loved Fluvanna, I thought that was a lovely idea. He enclosed a picture of his red and white peony beds, and in those her ashes lie.

I still have the picture and his letter. May the UVA Alumni Association care for the property, keeping Mr. Pace’s values in mind. And take care of those peony beds!

Susan Wandover (Col ‘55)
Remsen, N.Y.