Saturday, September 17, 2005

Bush's Economic Quandary: More Fuzzy Math

President Bush this week announced that it'll "cost whatever it costs" the U.S. government to rebuild the Gulf in the aftermath of Hurricane Katrina's unprecedented destruction. On the surface this massive effort, estimated to reach between $200-$300 billion--roughly the same as the wars in Afghanistan and Iraq--is sure to send the nation into an economic tizzy. We're already operating at a $353 billion deficit, yet Bush is still intent on pushing through permanent tax cuts for America's wealthiest income-earners which will extract $1.4 trillion over 10 years from the Fed's pocketbook. The Bushies are also determined to repeal the estate tax as well, which would reduce government revenues by about $280 billion from 2011 to 2015, with the bulk of this windfall remaining in the 500 wealthiest estates.

At his address to the nation this week from New Orleans he also said he will not raise taxes to pay for the recovery; will provide generous corporate tax breaks to Gulf businesses; and will partially offset the recontruction expense by slashing other programs, though he did not elaborate on which budgets would be cut. More fuzzy math from the prez: 1+1=3. Republicans on the hill are growing leery of Bush's spending without a rational plan to fund it all. Even the venerable conservative think-tank, The Heritage Foundation, has projected massive increases in the deficit, to $520 billion by 2008, precisely the same time when the Bushies' had previously predicted they'd be cutting the deficit in half to about $200 billion. According to HF's budget analyst Brian M. Riedl, there's an economic perfect storm consisting of the spiraling cost of the Iraq war; the Gulf reconstruction; and the Medicaid drug program. Additionally, Bush's $286 billion transportation bill, which includes tons of self-serving pork, will appreciably tax the economy. And, given what we now know about how woefully unprepared we are for national disaster and/or a catastrophic act of terrorism, Bush will likely fatten Homeland Security's budget as well. If the first 5 1/2 years of the Bush presidency is any indicator of the next 2 1/2, the rich will keep getting generous tax breaks as we continue to saddle future generations with historically high debt. Andy


All_I_Can_Stands said...

Andy, so you think all dollars in the budget are well worth spending and there is no room to cut spending? No I am not talking about the dead dog discussion of the military and Iraq spending. Wouldn't you say there were billions of dollars of non-military wasted dollars that could be cut?

If you take it down to the individual level, a debt counselor knows that added revenue is often not possible. He focuses on SPENDING. Why do you libs always focus on taxes as the answer? Cut out the bloat, waste and fraud and there are billions that could be cut.

Anonymous said...

Yes, all i can stands, there is fat to be cut in the current budget, but there are also some things on the revenue side that can be done. For one, the article mentions the estate tax (not death tax) as providing hundreds of billions. Why do you righties want to cut that while only benefitting those leaving estates worth several million dollars. No family farm has been forced to liquidate in many years in order to pay off estate taxes. And why have we cut taxes while fighting a war for the first time in our 200+ year history as a nation? "This makes no sense to me at all.