Wednesday, August 29, 1984
Daily Ncbraskcn
rv ( i ii ti
. deficit- sio
conomic i
TT s
9ecovery
Future effects
are uncertain
Ever sir.ee the 19S4 presi
dential campaign ber an re
sident Reagan's nj ponents
have criticized thr wd def . it
more than other ape t of his
presidency.
Ai V' al news stories and edi
toria . have decried the deficit.
Commentators haw said Reagan's
nearly $200 billion deficit will be a
burden to future generations.
The deficit may damage the
economy, and maybe a burden to
future generations. But the deficit,
according to Jerry Petr, UNL pro
fessor of economics, is largely
responsible for the recent eco
nomic recovery.
The government, Petr said, has
been spending more money than
it has received from taxes. This
deficit spending has given a boost
that accounts for the healthy
economy the United States has
now, he said.
Reagan supporters praise his
economic policy and say he is
making America strong again.
There's a discrepancy there.
Reagan called for a balancedbud
gct when he began his 10S0 cam
paign. Yet he has the most unbal
anced economy in VS. history.
And he's capitalizing on that dis
crepancy, although voters now
he&r little about that balanced
budget
Petr said the deficit may hike
interest rates, arid that makes
the United States a popular place
for foreign investors to save their
money. That makes the dollar
strong overseas, Petr said, and
makes buying imports attractive
and profitable. It does however,
make it more difficult for Ameri
can manufacturers because im
ports are much cheaper.
The high interest rates are evi
dent. The United States has the
highest real interest rate ever.
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High interest rates make it diffi
cult for private business to get
the capital it needs to renovate,
hire and improve.
But the deficit is not like a
bomb about to explode. It may
cause high interest rates, a stag-
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nant economy or inflationary pres
sure if the deficit continues to
grow when the economy is on a
steadier footing. But it probably
wont cause the economy to crash.
Effects of the deficit will take
time.
e
The deficit is a serious prob
lem, but it's a sticky, messy prob
lem, and it is hard to tell what it
will do. And it should not be
ignored, as Reagan has done so
far.
Reagan has promised not to
raise taxes, and in all likelihood
he will try to increase the defense
budget again. It follows that the
deficit will continue to grow, and
grow and grow. And well just
have to wait and see what happens.
owntown business climate too c
old
for Lincoln smoke
owner
Editor's note: Lincoln citherns have a let
to say &bot local and msticnal issues.
In Lions Koppelman's weekly colaran,
she profiles people who either affect or
are affected by the day's isssss.
Despite valiant efforts to boost busi
ness in downtown Lincoln, the long-term
picture is dim in the eyes of at least one
veteran businessman.
ClifT Tfccne's smoke and gift shops, as
well as his lounge downstairs, are famil
iar fixtures at 1200 O St. Cliff said he's
been in business for 25 years at that loca
tion a perfect perch for watching busi
nesses come and go.
ICoppslman
DcTiTtoni drve!c7nt b trlcly
tetjsiESSS, e-STTsdillj far cerrirce
tUsa wcrksr Tczs iler. Ileter, ti
Eaie Cctiistxiicilos, cses ttts to
work cat!: 2 ceiHrj cftls cc? Cts
dczt Sarr-Iss Cezlcr in iL-i Clim
Cliff also watches the rise and fall of
local government and private enterprise
plans to boost flagging interest in down
town businesses.
Cliff said the developers of Haymarket
Square and Gold's Galleria have good
intentions, but added that such projects
may do more harm than good.
"I think it will just spread out the cus
tomers we do have," he said. "Make the
pieces of the pie thinner."
Fall is the season when university and
government folk are back in. force and
businesses start their yearfybuOd toward
the Christmas peak.
But even Santa Claus wont be able to
save some businesses this year. Cliff said he
expects the J.C. Penney store at 13th and
O streets and "several other businesses"
to close shop soon.
Cliff listed a host of problems that
plague downtown businesses. Lack of
adequate parking space tops the list
Providing new parking garages would
ease downtown's dependency on walk-in
customers, Cliff said.
"IVe seen ladies drive around the block
20 or 30 times," Cliff said. "They give up."
But building parking garages the size
Lincoln needs would cost hundreds of
thousands of dollars. And Cliff doesnt
think any downtown businessmen will
invest in a garage.
"You know all the work they did down
town putting in trees and everything?
Well, we paid for it," Cliff said. "It took two
or three years, and we lost a lot of busi
ness because of the construction."
Cliff also said the failure of the pro
posed bypass that would have connected
northeast Lincoln and the city's interior
also limited access to downtown.
But the most drastic drop in down
town customers came with the develop
ment of neighborhood shopping malls
and the three big malls: Gateway Shop
ping Center, the Centrum and East Park
Plaza. Even though the malls have re
cently lost a few stores Gateway bid
farewell to Magee's, Hovland-Swanson
and Electronics Unlimited this year
Cliff thinks the big malls will easily recoup
their losses.
"New businesses will pay more for their
leases than the old ones paid," Cliff said.
"Youll have the nationals coming in to
replace the locals."
Cliff opened a shop at East Park Plaza,
but said he sold it about three months
ago because he "couldnt handle it." He
said he's disheartened to see national
companies replacing locally owned busi
nesses. He said national people often
bring in their own executives and leave
Lincoln residents unemployed.
"Those people are used to paying higher
rents," he said. "They've got the buying
power of hundreds of stores. And the
money leaves Lincoln, leaves Nebraska,
leaves the Mjdwest"
ClifT said he's heard talk about encou
raging national companies to move down
town, but he said that a move is unlikely.
Nationals won't move into small down
towns like Lincoln's, he said.
What are downtown businessmen doing
to CDmbat fewer customers and smaller
profit margins?
"Working longer hours," Cliff said. "1
havent had a vacation in four years."
He said he's also cut down on employees.
Cliff works six days a week both in the
shops upstairs and the downstairs lounge.
His wife works five ".ys a week tending
bar.
Meanwhile, he wc.i and watches the
comings and goings cf downtown busi
nesses. At an age "when many business
men haw long retired to their golf courses,
Cliff is still behind the counter.
"IVe got to make a living," he said.