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CLINTON MUST DECLARE WAR AGAINST DEFICIT, SAYS FORTUNE 500 CEO Debt Threatens to Ruin Clinton Presidency

 CLEVELAND, Jan. 18 /PRNewswire/ -- Whatever action President-elect Bill Clinton takes to reduce deficit spending will determine the success or failure of his presidency, says best-selling author Harry E. Figgie, Jr, CEO of Figgie International Inc.
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 "Continuing our string of deficits -- which, in turn, raises interest charges on the debt -- will set off a chain of circumstances that will lead to the economic collapse of this country, not to mention the failure of Mr. Clinton's presidency," Figgie warns.
 "Any increases in deficit spending threaten to erode the long-term economic stability and global competitiveness of the country. The only way Clinton can change the entrenched system of overspending and waste is by fighting the deficit with the same resolve used in fighting a war."
 Figgie has commissioned more than seven years of research, directed by economist Gerald Swanson, on the impact of government debts and deficits on foreign economies. Results of this research and other findings are discussed in the New York Times best-seller Bankruptcy 1995, written by Figgie and Swanson. The book (Little, Brown & Co.), released in September, covers how and why the U.S. deficit and debt have grown out of control, describes the consequences of continued deficit spending, and outlines action needed to prevent those consequences.
 "President-elect Clinton has rightfully identified deficit reduction as one of his top priorities, but the strength of his commitment remains unclear," says Figgie. "Clinton must not make the same mistakes his predecessors made, masking the size of the deficit and breaking promises to reduce it. Our country is headed for a financial breakdown without immediate action on deficit reduction."
 Figgie says that Clinton must take the following action:
 -- From his first day in office, he must take leadership
 and demand the assurance of the newly elected Congress
 that the deficit and debt issues will take first priority.
 -- Clinton must appoint as "commanding general" of the war
 on government waste a U.S. business person with proven
 experience at cutting costs, streamlining operations,
 and pulling companies out of bankruptcy.
 -- He must assemble volunteers from the business sector to
 help tackle the deficit crisis. These task forces
 should include individuals at our top management
 consulting and accounting firms, who can make government more
 efficient and responsive to its customers.
 -- Clinton must assemble congressional leaders into a
 deficit war cabinet, which can compose appropriate
 legislation to swiftly turn the recommendations of the
 business experts into action.
 -- He must mobilize the support of the American people
 behind the debt-fighting initiative.
 Figgie says that while Clinton is reported as being surprised at the Bush administration's revised, larger deficit projections released in early January, the incoming president should have known all along that the problem is worse than Washington was projecting.
 "Our lawmakers in Washington have relied on inaccurate estimates, twisted logic, and enormous loopholes in order to continue running huge budget deficits," economist Swanson says.
 Swanson points out that Washington uses number juggling to understate deficit spending. He says that while the Department of Treasury reported a 1992 deficit of $290.2 billion, deficit spending for the year actually reached $403.9 billion.
 "A closer look at the Treasury's statement for fiscal year 1992," says Swanson, "shows that money borrowed from federal trust funds, which is already allocated to pay Social Security and other benefits for today's workers when they retire, is subtracted from the total deficit to understate actual deficit spending."
 Swanson notes that recently, the official mood in Washington seems to be shifting toward the urgency of deficit reduction.
 "It was refreshing," Swanson says, "to hear (incoming budget director) Leon Panetta explain at his confirmation hearings why we must confront the deficit. Panetta said that we need to confront these deficits, make tough choices, and be prepared for some sacrifice, in order to make our economy more productive and provide greater opportunity for our children tomorrow. Let's hope that his zeal for solving the deficit crisis is adopted by the entire Clinton administration."
 Harry E. Figgie, Jr., is Chairman, Chief Executive Officer, and founder of Figgie International, a diversified Fortune 500 operating company with headquarters in Cleveland. In the 1980s, Figgie served as co-chairman of the Private Sector Survey on Cost Control, also called the Grace Commission, a task force established by President Ronald Reagan which studied how the government could eliminate waste. Figgie has studied the deficit and how it affects the business environment for over 10 years. He is founder of the Academy for Economic Education, and author of Cutting Costs: An Executive's Guide to Increased Profits. He holds a B.S. in metallurgical engineering, a master's degree in industrial engineering, an MBA from Harvard Business School, and a law degree.
 Dr. Gerald J. Swanson is an Associate Professor of Economics at the University of Arizona. He is author of Hyperinflation: Lessons from South America, which was commissioned by Figgie International.
 -0- 1/18/93
 /EDITOR'S NOTE: Harry Figgie and Gerald Swanson can be made available for interviews/
 /EDITOR'S NOTE: The following graphics are available without charge on your photo receiver. Have photo editor dial in to 212-967-1293, 212-643-2005 or 212-643-2006 for the picture numbers following each description/
 1. Debt level graphic (bar graph): Each bar shows dollar bills stacked on top of the U.S. Capitol. In the bar representing 1995, the stack is at its highest, and the Capitol is crumbling. (PRN118CL1D)
 2. Torn dollar bill graphic (line graph): The tear along the dollar bill forms a rising line as the years progress, representing the increase in interest on the debt in relation to income tax revenues. (PRN118CL2D)
 3. Stacked coins graphic (bar graph): Each bar, shown as a stack of coins, shows debt as a percentage of Gross Domestic Product. The stack is at a high in 1947 (World War II), goes steadily down from 1957-1967, and then rises to a high again in 1997 that nearly matches 1947's wartime level. (PRN118CL3D)
 4. Double-line graph shows the level of U.S. debt rise and overtake the size of U.S. output, or Gross Domestic Product. U.S. debt goes nearly straight up after 1995. (PRN118CL4D)
 /CONTACT: Cheryl Brady or Gary Wells, both of Dix & Eaton, 216-241-0405, for Figgie International/


CO: Figgie International ST: Ohio IN: SU:

KK -- CL004 -- 5809 01/18/93 10:13 EST
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Date:Jan 18, 1993
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