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