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July 30, 2002

Krugman Nails Bush Lies

Usually Krugman's columns speak for themselves, but today's is too important to go without additional comment.

First, the collapse of the stock market means that private and public pensions now have to start pumping billions of dollars into pension funds now that speculative capital gains won't cover the shortfall. Krugman cites to a Business Week article which notes that if plans lose just 5% this year, they will be $150 billion in the hole. Quoting one analyst: "The squeeze on U.S. pension funds has the potential to be the defining U.S. financial crisis of the 2000s, like the savings and loan squeeze of the 1980s."

Second, Krugman nails former New Jersey Governor and now Bush EPA Director Christine Whitman for looting state pension funds in the 1990s to pay for tax cuts. She wasn't alone in running the state like a "banana republic", in contrast to the fiscal discipline at the federal level until Bush came into office.

Which brings us to Bush, whose Office of Managment and Budget put out a press release that their new mid-year review shows that tax cuts only account for 15% of projected deficits. Krugman says succinctly, "O.M.B officials simply lie about what their own report says." According to an analysis by the Center on Budget and Policy Priorities, the report shows that 38% of projected deficits derive from last year's irresponsible tax cut.

This last point is where Jeff Hauser can justifiably ask where is the media frenzy over Bush flat out lying to the American people?

Posted by Nathan at July 30, 2002 07:18 AM

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