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Local economists: Federal spending driving affordability issues locally, nationally

Photo: Contributed


CHARLOTTESVILLE, VA (CVILLE RIGHT NOW) – It may be rare to find times when both conservatives and progressives agree, but two University of Virginia economic professors both have highlighted issues with federal spending, and how it is affecting affordability in Virginia and around the country.

Dr. Edwin T. Burton, a professor of economics at the University of Virginia for over 35 years, said federal approaches to health care and the national debt are drastically impacting the cost of living in terms of housing and nearly everything else.

“I think if there is one issue that is affecting the American economy that really has to be dealt with its the national debt,” Burton said during an appearance on WINA Morning News.  “38 to 39 trillion is where it stands, and the worst part is that it’s still growing.  The deficit is running just under six percent and by the time you get to the end of the year it could be it could easily be seven percent, the administration is asking for another 200 billion for the war and another 500 billion for the military budget and that doesn’t count all the problems that are showing up in medicare and social security and all the other areas, so we need to focus on the problems with the national debt. Europe has the same problem but it is not as bad let me give you a couple of numbers, one the U.S. has about 120% debt compared to GDP (gross domestic product) if you look at the total debt including the unfunded part.  Germany has around 70% and on the other hand Spain has over 100% and Italy and Greece are in the same area.”

Burton noted that, aside from military spending, a primary culprit for most countries is the sky rocketing costs associated with health care.

“They all have the same problem, health care really globally is driving the debt and demographics are not friendly,” he said. “We’re getting more people like me, (a person over 70) and people like me need to visit hospitals more often and that raises health care costs, so this problem doesn’t go away it requires attention and guess who’s paying attention….no one.”

While Burton identifies as a Republican, former Democratic State Delegate, economist and current professor at the Frank Batten School for Public Policy, Sally Hudson views federal spending as a core problem with affordability as well.

“Well, I think just like in your household budget, debt can have a purpose,” Hudson said during an appearance on WINA Morning News. “If you need to make a serious purchase like a home that you can’t pay off, month to month, then making that investment and being responsible with how you manage that debt load can make it easier for you to level up in life and I think the same is true for government whether local or federal.

“There are some investments we gotta make like building schools or taking care of our waterways or our roads, I mean that costs a lot of money up front and the benefits pay off over time and that’s what that is for and we can use it responsibly. I think what is so frustrating at the national level is that the biggest contributors to our national debt are not the investments we make in our communities and each other, its these massive tax write offs for some of the wealthiest Americans and its all the money we are blowing on bombs in a war overseas that’s how we’re ballooning our national debt these days.”

Hudson said the government can make smarter choices regarding investments in human services and infrastructure in our country but she believes that is not the priority of the federal government.

“We are setting money on fire, literally, day after day in ways that don’t have tangible benefits to Americans and that I think is the really frustrating problem that we gotta face,” she said.

The discussion around affordability is a major one even at the state and local level as Gov. Abigail Spanberger continues to review bills that can impact costs for Virginians and local governments like Charlottesville and Albemarle are finalizing their budgets and appropriating funds for affordable housing initiatives.

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