Our View

Say this about Rex Jensen, chief executive officer of Schroeder-Manatee Ranch: He is a man of action and vision.

And his latest action and vision are long overdue for the Greater Sarasota-Manatee region.

Jensen, along with the Gulf Coast Community Foundation and Lars Hafner, president of the State College of Florida, announced Tuesday their intention to construct a 72,000-square-foot facility on the eastern edge of University Parkway in Lakewood Ranch to serve as a one-stop, all-encompassing resource center for economic development as well as the nucleus for what Jensen hopes to become the new central campus for the State College of Florida.

The three groups dubbed the center “DEAL” — the Design and Economic Acceleration Lab.
It makes a lot of sense.

For far too long, the recruiting of new companies, the servicing of companies interested in moving here and the assistance provided to existing companies that want to expand have been a disjointed, inefficient and parochial process. To wit: Manatee and Sarasota counties each has its own economic development council. And that makes sense. The two jurisdictions have different government rules and policies. And like most political jurisdictions, each county has its politics.

But for prospective customers, it’s a hassle. Imagine the out-of-state company considering moving to this region. Its executives travel back and forth between counties, lining up meetings with economic development, chamber of commerce and government officials to gather pieces of information to be able to determine the best place to locate. Talk about an inefficient, exasperating process.

Jensen’s vision is to bring everyone involved in this process under one roof to serve as a Walmart of economic development information — a one-stop shop with representatives from every organization and agency involved in a corporate expansion or relocation. He sees the DEAL center housing databases of information for prospective companies on such things as inventories of available commercial space and housing; spreadsheets of comparative tax data; or access to resumes of prospective employees. And he sees State College of Florida serving as a primary institution focused on training and educating students to meet new and existing companies’ work-force needs.

Indeed, it would provide a great boost to the area to see State College of Florida blossom in a new central campus and become to this region what Gulf Coast University of Florida is to Lee and Collier counties and what the Ringling College of Art and Design is to the animation industry. Let’s be honest: As much as we want to believe the University of South Florida Sarasota-Manatee is an educational anchor here, it always will be a branch of the Big Campus in Tampa. And New College of Florida operates in a specialized niche. SCF has the potential to serve the widest market here and become a steady fuel for work-force and economic development.

As he often does, Jensen is bucking tradition and challenging the status quo with this new DEAL. No doubt he will make the tradition-bound economic development interests here uncomfortable and feel threatened. But they need not react that way. It’s time to break out of comfort zones and embrace new thinking and new ways of operating. Competition to new companies is always intense. It makes a lot of sense then to shift away from the traditional parochial interests and focus instead on the needs of the customers. Kudos to Jensen, Hafner and the Gulf Coast Community Foundation for taking risks and steps to be innovative.

+ The U.S. debt, deficit bombs
Now we shall see. We shall see whether the new U.S. House of Representatives, led by the Republican majority, has the courage of its alleged convictions.

We say “alleged” convictions because we have no definitive actions as of yet to determine whether the Republicans will deliver on their campaign promises and actually cut, reduce, slash and eliminate the national government’s immoral annual deficit spending and immoral debt.

As of Tuesday, with the start of the new Congress, the test of will began. Are they really willing to sacrifice their political power for the financial well-being of future generations?

If they are, severe pain cannot be avoided. It’s as if an economic mushroom cloud is moving our way. Consider:

• Inflation. Rising prices for food, gas and other commodities are spreading rapidly, thanks largely to our Federal Reserve Bank flooding the market with dollars, i.e. creating and printing money out of thin air. That in itself — printing money — is inflation.

But now, as predicted and to little surprise, we are seeing the effects. In 2010, the Economist magazine’s commodity price index rose 33.5%; industrial materials rose 37.4%.

This price inflation has spread to India and Asia. History (1971, 1980) says it will not be long before it spreads here. We’ve already seen it in gas prices and at the grocery counter. Your dollar does not buy as much as it did a year ago. Printing dollars has made the money in your pocket worth less today than it was a year ago. Unless directions change, the speed at which your dollars lose value will increase.

• Structural deficits. Look at the graphic below. It provides perspective on how far out of whack our annual government spending is vis-a-vis other spendthrift countries. Structural deficits are how much government spending exceeds income even in a healthy economy. We are the Godzilla — out spending our income by $1.2 trillion a year! What family do you know who can sustain that spending so far beyond its means?

• National debt. Our gross federal debt will reach $14.3 trillion in March. Borrowing is an addiction. The United States borrows 40 cents for every $1 it spends. And in two months, the federal government’s borrowing will take us to the federal debt ceiling limit once again.

Digest this: In 1917, Congress set our government’s first debt ceiling at $8 billion. Just before World War II, it rose to $65 billion. With Richard Nixon, it reached $431 billion. After 9/11, the debt ceiling was $5.9 trillion. Less than 10 years later, we are soon to top $14 trillion. Our debt has risen 14,000-fold in a century.

William Buckler, a brilliant Australian analyst of global financial issues, writes in his most recent edition of his monthly newsletter, the Privateer: “The progression has become exponential. The end result — the complete collapse of the 20th-century ‘model’ of a financial and monetary system based on governments issuing IOUs — is obviously inevitable. The only remaining question is when will it happen?”

We have reached our economic Rubicon.

The new Republican House must decide whether to raise the ceiling and allow the government to increase the national debt even more or take demonstrative steps that cut spending.

We will find out about the Republicans’ convictions. Meantime, we — all of us — also bear a burden. Just as the Greatest Generation sacrificed in blood and lives to preserve liberty from tyranny in the 1940s, its descendants now face a similar challenge. It’s not war, but the looming economic collapse requires similar courage — the courage to support congressmen and senators to do what must be done: truly reverse the size and spending of government. Save our children and grandchildren from a certain destiny of a declining standard of living.

HOW NATIONAL STRUCTURAL DEFICITS COMPARE
The circles show a proportionate representation of the size of each nation’s annual deficits in dollars. The smaller figure is what percent the deficits represent of national gross domestic product. Of the nations represented, only Ireland’s deficit represents a higher percentage of GDP than the U.S. deficit. 
To view the graph, click here.