Bush's sick priorities create economic mess
Bush's first-term tax cuts were too expensive and too skewed toward top earners to work as effective, self-correcting economic stimulus. Instead, predictably, they've driven the nation deep into the red. Having reduced tax revenue to a share of the economy not seen since 1959, the cuts are a huge factor in the swing from a budget surplus to a $412 billion deficit.
... Mr. Bush has unceasingly pursued deficit-financed tax cuts, even as the weak dollar has failed to fix the trade imbalance. The result is that the country's deficits - and borrowing needs - remain enormous even as dollar-based investments are becoming less attractive.
Lately, Mr. Bush has been talking the deficit reduction talk, but there's no sign that he is willing to walk the walk. In his 2006 budget, he pledges to slash spending, but largely in areas that would have only a small impact on the deficit and where cuts would be politically difficult, not to mention cruel, such as food stamps, veterans' medical care, child care and low-income housing.
Meanwhile, he is pounding the table for more deficit-bloating measures - making his first-term tax cuts permanent, at a 10-year cost of as much as $2.1 trillion; putting into effect two high-income tax breaks that were enacted in 2001 but have been on hold, at a 10-year cost of $115 billion; and introducing new tax incentives to allow high earners to shift even more cash into tax shelters, at a cost that would ultimately work out to more than $30 billion a year when investors cashed in their accounts tax-free.
Oh, yes. Mr. Bush also wants to borrow some $4.5 trillion over two decades to privatize Social Security, which is a bad idea even without the borrowing and a horrendous one with it.
The global financial community won't be fooled.
- posted by geoff @ #