Patrick B. McGuigan
State Treasurer Ken Miller said the fundamental trends for the Oklahoma economy are “up, up and up.” He told reporters, during his monthly discussion of state government revenue trends, that “every single number for the past 12 months is positive.”
Still, Miller cautioned the impact of the national debt ceiling and possible default could wreak havoc on the Sooner State’s sustained positive economic surge.
He said, “We are not immune to trends elsewhere, as we saw in the Great Recession. Our entire economic system could face serious repercussions if Congress allows default. That would trigger negative effects on interest rates, the value of the dollar and job growth. We need a credible long-term solution to the debt issues.”
In response to a question from CapitolBeatOK, Miller agreed that the message of state governments like Minnesota, Wisconsin and Illinois -- each now in crisis or near-crisis, fiscally – is that government spending must be limited in ways that are realistic and effective.
Miller cautioned, “How to address this is not, or at least should not be, a partisan issue. Spending has been pretty irresponsible on both sides of the aisle. Spending cuts will have to be at the center of any decision to increase the federal debt limit.”
Even while expressing deep concern about the national debt limit and what he deemed potentially “disastrous” effects from default, Miller asserted, “All this fanfare is a positive, similar to all the fanfare we saw here in Oklahoma on the problems of pension debt.”
He continued, “We finally paid attention to that problem, and the Legislature passed meaningful legislation that has, in fact, made the circumstances better. Congress, similarly, must act in a meaningful way on the spending problems that have caused the national debt, and brought us to the edge of default.”
Miller’s upbeat assessment was leavened throughout with caution: “The expansion here in Oklahoma is not anemic. However, the economy as a whole is too fragile to handle a default of the full faith and credit of the United States.”
Asked to address the “revenue vs. spending” debate at the national level, Miller told the state Capitol press corps, “I think the fundamental issue of the debt ceiling is spending. We’re expecting a high level of service without enough money to fund those. We have to be more realistic in what we expect from government. It is critical that we don’t fund ongoing expenditures with borrowed money.”
Miller said he was encouraged by state Finance Director Preston Doerflinger’s estimate that the eventual Rainy Day Fund deposit “could be double” the earlier estimate of $70 million.
Briefly touching on other topics, Miller said he believes gambling is “a dampener of the economy.” Therefore, he did not concur with one reporter’s speculation that tribal gaming revenues were contributing to the state’s economic surge.