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BUSH
Budgets
Tax Cut Estimator,
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Tax Cut Analysis
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Chart: Deficits since
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Bush
Fiscal Crisis *
"I think the
greatest threat to our future is our fiscal irresponsibility," warns
David Walker, the comptroller general of the United States. Mr. Walker,
an accountant by training, asserts that last year may have been the most
fiscally reckless in the history of our Republic. Aside from the budget
deficit, Congress enacted the prescription drug benefit - possibly an $8
trillion obligation - without figuring out how to pay for it.
Mr. Walker, America's watchdog in chief and head of the Government
Accountability Office, is no Bush-basher. He started out his career as a
conservative Democrat, then became a moderate Republican and has been an
independent since 1997. Now he's running around with his hair on
fire, shrieking about America's finances. Well, as much as any
accountant ever shrieks. I asked Mr. Walker about Paul Volcker's
warning that within five years we face a 75 percent chance of a serious
financial crisis. . . .
Kristof, NY Times,
6/26/05
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Bush's
Junk Bonds *
Imagine this:
On his next trip to Japan, President Bush visits the vault at the Bank
of Japan, where that country's $712 billion in United States government
bonds is stored. There, as the cameras roll, he announces that the
bonds, backed by the full faith and credit of the United States, are, in
fact, worthless i.o.u.'s. He does the same thing when he visits China
and so on around the world . . .Mr. Bush rehearsed just that act on
Tuesday, when he visited the office of the federal Bureau of Public Debt
in Parkersburg, W.Va. He posed next to a file cabinet that holds the
$1.7 trillion in Treasury securities that make up the Social Security
trust fund. He tossed off a comment to the effect that the bonds were
not "real assets." Later, in a speech at a nearby university, he said:
"There is no trust fund. Just i.o.u.'s that I saw firsthand."
NY Times
Editorial, 4/8/05
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Bush Shrinks
Dollar *
The dollar is
falling! The dollar is falling! But the Bush team
has basically told the world that unless the markets
make the falling dollar into a full-blown New York
Stock Exchange crisis and trade war, it is not going
to raise taxes, cut spending or reduce oil
consumption in ways that could really shrink our
budget and trade deficits and reverse the dollar's
slide. . . "And with any kind of sudden market
disruption - caused by anything from a terror attack
signs that a big country has gotten queasy about
buying dollars - the bubble could burst in a very
unpleasant way.". . On Monday, the Bank of Korea
said it planned to diversify more of its reserves
into nondollar assets, after years of holding too
many low-yielding and depreciating U.S. government
securities. The fear that this could become a trend
sparked a major sell-off in U.S. equity markets on
Tuesday.
Friedman, NY Times 2/24/05
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Bush's
Exploding Deficit*
Bush will
propose spending $2.5 trillion in the budget year that begins Oct. 1.
For the current year, he is estimating the budget deficit will reach a
record $427 billion. That compares with last year's $412 billion deficit
and is the third straight year the Bush administration will have set, in
dollar terms, a deficit high. The five-year projections in the
budget will show the deficit declining to about $230 billion in 2009,
when a new president takes office. Those projections do not take
into account some big-ticket items: the military costs incurred in Iraq
and Afghanistan, the price of making Bush's first term tax cuts
permanent, or the transition costs for his No. 1 domestic priority,
overhauling Social Security. Sen. Kent Conrad,. . .said Bush's
budget "talks about the next five years of reducing deficits, but . . .
after that five-year window. The cost of everything he advocates
explodes." MARTIN
CRUTSINGER, AP 2/6/05
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Bush's
Impressive Shenanigans*
First, the
White House itself admits the deficit this year will reach $427 billion,
a new record - or, I should say, another new record, coming on
the heels of last year's record $412 billion. We'll hit this exciting
new mark thanks to a fresh $80 billion in cash for Iraq, which pushes
the three-year total for this war toward $300 billion. For those keeping
score, that's more than the inflation-adjusted cost America incurred to
fight World War I, and it's closing in on the cost of the Korean War.
But the CBO's long-term forecast of $855 billion in deficits over the
next decade dramatically understates the red ink poised to flow. That's
because arcane rules require the CBO to assume that (1) no additional
money will be spent in Iraq or Afghanistan, that (2) President Bush's
tax cuts will soon expire (though he's pushing the GOP-controlled
Congress to make them permanent), and that (3) the increasing bite of
the alternative minimum tax will not be addressed (though both parties
vow to act). Add up these and a few less shocking but still
impressive shenanigans and you end up with deficits that top $5 trillion
in the next 10 years, at which point the baby boomers' costly retirement
will turn this mere flood of red ink into a true tsunami.
Matt
Miller Online, 1/26/05
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Bush
Deficits Threaten U.S. Economy and Word Trade*
China has lost
faith in the stability of the U.S. dollar and its first priority is to
broaden the exchange rate for its currency from the dollar to a more
flexible basket of currencies, a top Chinese economist said Wednesday at
the World Economic Forum.. . .Fan Gang, director of the National
Economic Research Institute at the China Reform Foundation, said the
issue for China isn't whether to devalue the yuan but "to limit it from
the U.S. dollar." . . ."The U.S. dollar is no longer - in our opinion is
no longer - (seen) as a stable currency, and is devaluating all the
time, and that's putting troubles all the time," Fan said, speaking in
English.
. .The
dollar hit a new low in December against the euro and has been falling
against other major currencies on concerns about the ever-growing U.S.
trade and budget deficits.
EDITH M. LEDERER, Associated Press, 1/26/04
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Weak
Bush; Weak Dollar*
The Bush
administration's de facto weak-dollar policy - its preferred "cure"
for the American trade deficit - is not working. Yesterday's trade
deficit report shows that imports outpaced exports by a record $55.5
billion in October. The huge imbalance was worse than the gloomiest
expectations. . .The United States, by any measure - trade, the
federal budget, personal consumption - is by far the world's biggest
debtor. The need to borrow in the face of an already weak dollar
portends higher prices and higher interest rates. How high and
how fast? Who knows? But one thing is sure: that American tourists
need to pay $5 for a demitasse in Paris will be the least of our
worries if mortgage rates spike, the stock market falls, and
businesses curb their already modest hiring. . . There are
alternatives to a single-minded pursuit of a weak dollar fix. What is
lacking is the leadership to pursue them.NY
Times Editorial, 12/15/04
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No
Celebration for Labor*
As
the Economic Policy Institute tells us, in a book-length report it is
releasing today: "The United States has been tracking employment
statistics since 1939, and never in history has it taken this long to
regain the jobs lost over a downturn." In "The State of Working
America 2004/2005," the [Economic Policy]institute shows in tremendous
detail how those lost jobs and other disappointing aspects of the
recovery are taking a severe economic toll on working families.
According to the institute: "After almost three years of recovery, our
job market is still too weak to broadly distribute the benefits of the
growing economy. Unemployment is essentially unchanged, job growth has
stalled, and real wages have started to fall behind inflation." . .
.This is a worse position, in terms of recouping lost jobs, than any
business cycle since the 1930's."
Bob
Herbert, NY Times,
9/6/04
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The
Rich Get Richer*
Fully
one-third of President Bush's tax cuts in the last three years have
gone to people with the top 1 percent of income, who have earned an
average of $1.2 million annually, according to a report by the
nonpartisan Congressional Budget Office to be published Friday. .
.People in the very top income categories fared better by almost any
measure, according to the report. The average after-tax income for
people in the top 1 percent of income earners climbed 10.1 percent,
while that of those in the middle 20 percent climbed 2.3 percent, and
that of those in the bottom fifth only 1.6 percent. . ."It's not just
that lower-income people are getting smaller benefits,'' Dr. Gale
said. "It's also that these tax cuts will eventually have to be paid
for with either spending cuts or tax increases, and those are likely
to be less progressive than the taxes they are paying now.''
EDMUND L. ANDREWS, NY
Times, 8/13/04
Bush
Jobs Growth Like Hoover's*
Job growth ground nearly to a halt last month,
the Labor Department reported Friday, in a new sign that the economy
has weakened in recent months. Employers added just 32,000 jobs
in July, a small fraction of what forecasters had expected and the
smallest gain this year. . .The weak job growth of the last two months
means that he is now highly likely to stand for re-election with an
employment level lower than when he took office, the first time that
has happened in 72 years, when Herbert Hoover lost to Franklin D.
Roosevelt in 1932. . ."It's premature for George Bush to raise the
banner of `Mission Accomplished' above the economy," said
Representative Rahm Emanuel, Democrat of Illinois. "If you're in the
middle class, the economy has not turned the corner."
DAVID LEONHARDT, NY Times, 8/6/04
Bush's Upper Income Base*
Upper-income families, who pay the most in taxes and reaped the
largest gains from the tax cuts President Bush championed, drove a
surge of consumer spending a year ago that helped to rev up the
recovery. Wealthier households also have been big beneficiaries of the
stronger stock market, higher corporate profits, bigger dividend
payments and the boom in housing. Lower- and middle-income
households have benefited from some of these trends, but not nearly as
much. For them, paychecks and day-to-day living expenses have a much
bigger effect. Many have been squeezed, with wages under pressure and
with gasoline and food prices higher. The resulting two-tier recovery
is showing up in vivid detail in the way Americans are spending money.JON
E. HILSENRATH and SHOLNN FREEMAN , WS Journal, 7/20/04
Bush's Decisive Human Failure*
In
2003, close to half the total US government discretionary expenditure
was used for military purposes. A large part was for weapons
procurement or development. . .corporate
power has shaped the public purpose to its own needs. It ordains that
social success is more automobiles, more television sets, a greater
volume of all other consumer goods - and more lethal weaponry.
Negative social effects - pollution, destruction of the landscape, the
unprotected health of the citizenry, the threat of military action and
death - do not count as such. . .The facts of war are inescapable -
death and random cruelty, suspension of civilized values, a disordered
aftermath. Thus the human condition and prospect as now supremely
evident.. . .War remains the decisive human failure.
JK Galbraith,
The Guardian, 7/15/04
Bush's Economic Optimism*
The average
weekly earnings of nonsupervisory workers rose only 1.7 percent over
the past year, lagging behind inflation. The president of Aetna, one
of the biggest health insurers, recently told investors, "It's fair to
say that a lot of the jobs being created may not be the jobs that come
with benefits." Where is the growth going? No mystery: after-tax
corporate profits as a share of G.D.P. have reached a level not seen
since 1929. What should we be doing differently? For three years
many economists have argued that the most effective job-creating
policies would be increased aid to state and local governments,
extended unemployment insurance and tax rebates for lower- and
middle-income families. The Bush administration paid no attention
Krugman, NY Times,
7/6/04
Believing Dick Nixon*
U.S. Chamber
of Commerce President and CEO Thomas Donohue is promoting overseas
outsourcing of jobs . . .he said. . . people affected by offshoring
should "stop whining." . . . "Endlessly debating whether offshoring is
good or bad is pointless - like debating whether you've had a good
trip on the Titanic while the iceberg comes into view," Forrester
Research Inc. analyst John McCarthy said Wednesday. "The jobs go
offshore today and the economic benefits don't come around for years.
For the unemployed guy to accept business leaders' position is like
believing Dick Nixon saying, `Trust me, I'll take care of it all.
Things will be fine.'"
Rachel Konrad,
Associated Press, 6/30/04
CEO
President Goes for Broke*
George Bush
has squandered our balanced budget and surplus, increased our national
debt, and is close to bankrupting his third company. The CEO
president, who bankrupted Arbusto Energy and Harken Energy, is about
to bankrupt the largest company he has ever been given the reigns to:
the United States of America. . .Unfortunately for Republicans they
have no choice because most primaries were cancelled due to the huge
support for Bush at the time Erik
Raske News Gleaner, 6/17/04
Bush
seitroirP
Based on
instructions in the memorandum, first reported by The Washington Post,
the Department of Education would have to reduce its budget by $1.5
billion in the 2006 fiscal year. Veterans programs would be expected
to cut their spending by $900 million. The National Institutes of
Health would have to trim back its budget by $600 million and the
National Science Foundation would be expected to cut $100 million.
EDMUND L. ANDREWS, NY Times, 5/28/04
[I]t is
still good to see that lawmakers sense the need to tightly vet the
president's $422 billion military budget request. . . Mr. Bush's
pie-in-the-sky missile defense program, which has already cost $130
billion and is years from ever being proved workable.
NY
Times Editorial, 5/28/04
Bush Busts
U.S.*
But there is a large mathematical
caveat. With the deficit already huge, set to reach almost $3 trillion
over the next decade, the Republicans' grand plans do not add up. You
cannot cut taxes yet further, let alone divert payroll taxes into
individual retirement accounts, without inviting a fiscal catastrophe.
Listening to these intriguingly
radical ideas, you catch an eerie echo of the boundless optimism that
used to characterise Mr Bush's foreign-policy team. Just as the
neo-conservative dream of democratising the Middle East had to
confront reality in the streets of Baghdad, so the “ownership society”
desperately needs someone to pay for it. That part of the equation
will not be mentioned very much on the hustings.
The Economist, May 13th 2004
The Bush
Salary Tax*
If
Bush gets what he wants, the income tax will become a misnomer—it will
really be a salary tax. Almost all income taxes would come from
paychecks—80 percent of income for most families, less than half for
the top 1 percent. Meanwhile taxpayers receiving dividends, interest
and capital gains, known collectively as investment income, would have
a much lighter burden than salary earners—or maybe none at all. And
here's the topper. In the name of preserving family farms and keeping
small businesses in the family, Bush would eliminate the estate tax
and create a new class of landed aristocrats who could inherit
billions tax-free, invest the money, watch it compound tax-free and
hand it down tax-free to their heirs.
Allan Sloan
Newsweek, April 12 issue
Bush's Class Warfare
The recent
productivity gains have been widely acknowledged. But workers are not
being compensated for this. During the past two years, increases in
wages and benefits have been very weak, or nonexistent. And despite
the growth of jobs in March that had the Bush crowd dancing in the
White House halls last Friday, there has been no net increase in
formal payroll employment since the end of the recession. We have lost
jobs. There are fewer payroll jobs now than there were when the
recession ended in November 2001.
So if employers were not hiring workers, and if they were miserly when
it came to increases in wages and benefits for existing employees,
what happened to all the money from the strong economic growth?
The study is very clear on this point. The bulk of the gains did not
go to workers, "but instead were used to boost profits, lower prices,
or increase C.E.O. compensation." . . .
I
have to laugh when I hear conservatives
complaining about class warfare. They know this terrain better than
anyone. They launched the war. They're waging it. And they're winning
it.BOB
HERBERT, NY Times, 4/5/04
Bush's
Wishful Thinking*
Despite a
string of dismal employment reports, the administration insists that
its economic program, which has relied entirely on tax cuts focused on
the affluent, will produce big job gains any day now. Should we
believe these promises? . . .the February 2004 forecast, which, as in
previous years, is based on data only through the preceding October,
is already 900,000 jobs too high.
Economic forecasting isn't an exact science, but wishful thinking on
this scale is unprecedented.
See
Chart Krugman, NY Times 3/9/04
Bush and
Jobs*
The Labor
Department report was as grim as faces on a bread line. Despite all
the president's promises, the economy added just 21,000 jobs last
month. No jobs were added by the private sector. The 21,000 additional
jobs were all government hires.
. . . The January tally was revised from 112,000 to 97,000. The
December count dropped from 16,000 to a pathetic 8,000. . .
over the past three calendar years the number of people aged 16 to 24
who are both out of work and out of school increased from 4.8 million
to 5.6 million, with males accounting for the bulk of the increase. .
. Among those having a particularly hard time finding work, according
to the report, are job seekers with college degrees and people 45 and
older. Herbert,
NY Times 3/8/04
Bush's One
Note*
Anyone who
questions his call for making the tax cuts permanent is seeking to
raise taxes on ordinary Americans. "Our opponents have their own plan
for these tax cuts -- they plan to take them away," Mr. Bush told a
gathering of Republican governors.
Mr. Bush isn't one to let the facts get in the way of a good political
argument. In fact, . . . Sens. John F. Kerry (Mass.) and John Edwards
(N.C.) would both keep in place the parts of the Bush tax cuts that
the president most likes to tout: the $1,000 child tax credit,
marriage penalty relief, the new 10 percent tax bracket. Rather, they
would undo the parts of the Bush tax cut that go to taxpayers earning
more than $200,000.
Washington Post Editorial, 2/28/04
Bigger Bush
Deficit*
President Bush's new tax and spending plan would produce deficits of
$2.75 trillion over the next 10 years, the Congressional Budget Office
reported Friday in the first detailed analysis of the White House
budget.
If there were no changes in taxes and if spending increased only at
the rate of inflation, the deficit would be about $2 trillion over the
next 10 years, the budget office reported today. But the new estimate
is $737 billion higher, primarily reflecting Mr. Bush's desire to make
permanent the tax cuts due to expire by 2011. . .As bad as these
numbers are, they are actually worse because they omit significant
costs that the president has omitted from his budget," said
Representative John M. Spratt Jr. of South Carolina,
RICHARD
A. OPPEL Jr. NY Times, 2/28/04
Bush the
Protectionist
in the longer run, we
need universal health insurance. Social justice aside, it would be a
lot easier to make the case for free trade and free markets in general
if, like every other major advanced country, we had a system in which
workers kept their health coverage . . .The point is that free trade
is politically viable only if it's backed by effective job creation
measures and a strong domestic social safety net. . .
Put it this way: there's a reason why the two U.S. presidents who did
the most to promote growth in world trade were Franklin Roosevelt and
Harry Truman, while the two most protectionist presidents of the last
70 years have been Ronald Reagan and, yes, George W. Bush.
Krugman, NY Times, 2/27/04
More Bush Mass Layoffs*
In
January 2004, there were 2,428 mass layoff actions by employers, as
measured by new filings for unemployment insurance benefits during the
month, according to data from the U.S. Department of Labor's Bureau of
Labor Statistics. Each action involved at least 50 persons from
a single
establishment, and the number of workers involved totaled 239,454.
(See
table 1.)
This marked
the most events for a January and the third highest
January level of mass-layoff initial claims since the series began.
Both
the number of layoff events and initial claims were higher than a year
ago.
January 2004 marked only the third time in the last two years that
initial
claims had increased over the year.
BLS, 2/25/04
Harvard MBA
Bush "Not a Statistician"*
Last week, the president's Council of Economic Advisers said in their
annual economic report that 2.6 million jobs would be created this
year. That figure, which most economists said was exceedingly
optimistic, would more than replace all the jobs lost since Bush
became president three years ago. . . .
On Tuesday, Treasury Secretary John Snow and Commerce Secretary Don
Evans refused to endorse the official estimate as they toured Oregon
and Washington to promote the White House's economic agenda. . . .
McClellan then quoted Bush, who has a Harvard master's degree in
business administration, as saying, "I'm not a statistician. I'm not a
predictor."
MARILYN GEEWAX,
Rocky Mount Telegram, 2/20/04
Bush for
Profits, Not People*
The Economic
Report of the President ['s]. . . discussion of health care, . .
.shows a remarkable indifference . . .The report also seems to
have missed the point of health insurance. It argues that it would be
a good thing if insurance companies had more information about the
health prospects of clients so "policies could be tailored to
different types and priced accordingly." So if insurance companies
develop a new way to identify people who are likely to have kidney
problems later in life, and use this information to deny such people
policies that cover dialysis, that's a positive step? . . .A recent
study found that private insurance companies spend 11.7 cents of every
health care dollar on administrative costs, mainly advertising and
underwriting, compared with 3.6 cents for Medicare
Krugman, NY Times, 2/17/04
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