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<< Dividing Up the Education Goodies | Main | More Illegal Actions by Wal-Mart >> November 10, 2003Bush's Deficit- $800 Billion by 2013?When I posted my recent entry about the massive debt Bush is foisting on our country, a number of comments chided me for accepting the very conservative assumptions of the Congressional Budget Office. A fair criticism since the debt will be even worse if Bush implements his stated policy goals, a point even the conservative Economist magazine agrees with: these official projections, and similar ones by the White House, bear no resemblance to reality. The CBO is forced by law to make extremely implausible assumptions both about taxes and spending. The White House does so because it suits Mr Bush's political purposes. No fiscal expert believes either of them.  As the magazine notes, making the tax cuts permanent, dealing with the oddities of the Alternative Minimum Tax, making realistic spending assumptions, and incorporating the Prescription Drug proposal makes the deficit careen out of control.
As the graph to the left shows, we could easily see annual deficits approaching $800 billion per year in ten years due to Bush's policies. The largest wallop is making the tax cuts permanent, which will cost the budget an additional $400 billion yearly by 2013. The sad fact is how much better Reagan looks in retrospect. Not only did he agree to correct many of his deficit mistakes with later tax increases, the 1986 Tax Reform Act was an actual improvement in tax sanity, as opposed to the bizarre mess Bush has made of the tax code. Some conservative defenders (and liberal critics) of Bush Junior see the deficits as a strategy to starve the budget and force dramatic spending cuts. But The Economist doesn't buy that Bush's policies are coherent enough to even justify that malevolent explanation: "this attempt to impose logic on the Bush strategy is belied by the administration's own actions. For all the talk of Social Security reform, the only White House action on entitlements has been to expand them...There is no admission [by Bush] that America faces a fiscal mess, and no shifting from the mantra that all tax increases, at all times, are bad. The real reason to fret about America's fiscal outlook is that this self-delusion shows little sign of changing." Posted by Nathan at November 10, 2003 02:07 AM Related posts:
Trackback PingsTrackBack URL for this entry: CommentsGood post, but I think you meant to say "1986 Tax Reform Act" not "1996 Tax Reform Act." Posted by: Kevin Block-Schwenk at November 9, 2003 09:17 PM thanks. Posted by: Nathan at November 9, 2003 10:04 PM I believe we're going to have to start over again (get rid of all Bush's tax cuts , save those on capital gains & dividends & those that benefit the poor and lower middle class), push spending growth limits indexing expenditure with the rate of inflation and perhaps slash certain expenditures if that's needed. I know this is opposed to Keynesian economic beliefs but Keynesian economics doesn't work in the real world and it's not what we should be using. We need to restrict spending and tax reductions so we can free up capital for private sector investment (instead of federal treasury bonds absorbing savings). I also support lowering interest rates to offset the drop in aggregate demand. Posted by: Richard Wilson at November 11, 2003 02:05 AM It's funny; the end of the Cold War was supposed to be a money-saver of sorts for the U.S., as military spending would decline to reflect the end of this long era of potential hostility. Yet military spending is going through the roof as the military industrial complex gets a blank check from the admin. in the aftermath of 9/11. I don't think the average American really understand how much money is at stake here, and how much these companies hold sway over our foreign policies. Eisenhower really saw the potential dangers of this situation when he made his courageous and prophetic farewell speech decades ago. I still find all the rhetoric about the missile shield amusing in a sad way. The lesson of 9/11 was that the government couldn't stop a score of determined men armed with razor blades. Yet this absurd program is receiving massive funding, along with other pork projects. Of course, given the administration's pre-emptive war policy, why would we even need a missile shield? Meanwhile, the VA hospital in Manhattan and others around the country face closure. What a repulsive situation; the establishment is all too eager to fund the machines of war, but can't scrounge up a few million in "chump change" to provide health care for the vets who've actually done the fighting. Nothing illustrates the hypocrisy of our "leaders" better. Posted by: Alan Katz at November 11, 2003 07:18 AM We were warned about the Defense Industrial Complex by a centrist Republican, to bad we didn't listen. Posted by: Richard Wilson at November 11, 2003 03:21 PM Diving and 2003, As. Posted by: women rape at September 1, 2004 11:48 AM Post a comment
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