November 25, 2003
Bush and Spending
Daniel Drezner has a link filled post on Bush's Budget. Daniel rightly notes that Bush is spending alot, in alot of different areas. When you break the numbers down on a per household basis you get the following numbers
- The federal government is spending $20,000 per household.
- The federal government in taking in $17,000 in taxes per household.
It seems pretty obvious that Bush is using the Treasury to try and buy the next election.
Steve Antler at EconoPundit has a post on this too, but I think he is missing the point to some extent. He points to an article by Joe Klein and then segways into his project about modelling the effects of repealing Bush's tax break. Uh? I'm not arguing a repeal of Bush's tax cuts, neither, do I think, is Daniel Drezner or Andrew Sullivan. Nor for that matter is Joe Klein. If anything it is the opposite when Klein writes the following,
The Medicare bill contains large gifts to pharmaceutical manufacturers; the energy bill is a $23.5 billion bequest to traditional-energy producers, with additional billions worth of free-range pork tossed in. "This is classic machine politics, the sort of thing we used to do," said a prominent Democrat. Hence the Wall Street Journal's opposition to both bills. After all, Bush is running such huge deficits that they might imperil the prospect of endless tax cuts—and even "increase pressure to raise taxes to pay for" these new programs, the editors noted.
Okay, he's quoting the WSJ and the above may not be his actual feelings on the issue, but going from the spending profligacy to repealing the Bush tax cuts isn't what this is about. Fine, leave the tax cuts, but don't go tossing the all the pork around.
And I am not complaining about the increases in defense spending either. Yes I know there is a war. Yes I know military spending goes up in such situations. Yes I support the War on Terror and yes I want things to work out in Iraq. So fine, increase military spending. But some of these other increases are simply staggering. Education has gone up (depending on how you measure it) 25-30% in the last 3 years! Now we have the pork laden energy bill, the pork rich Medicare Bill which will bring about Medicare insolvency much sooner. Just wait till those Baby Boomers start to retire! This program is going to cost far more than $400 billion in its first 10 years, trust me.
Naturally Bush wants to win again and stay in the Oval Office. So he is using the Treasurey to buy off votes. The truly sad thing is may not work. Just because he tossed this nice pork covered bone to the elderly does not mean they have to vote Republican. Now wouldn't that be a pisser. Bush gets this damn bill passed, then loses the election. We get Dean in office who yanks the troops out of Iraq, and Saddam or his near twin takes power in Iraq, or even worse, Iraq becomes like Afghanistan and the new home for terrorist organizations. On top of it we have a bill that brings even closer the day that Medicare/Social Security go insolvent and these two programs start eating up more of the budget, and/or taxes have to be raised to pay for these money sucking programs.
Posted by Steve at November 25, 2003 06:04 AMWhy exactly do you think Dean would 'yank the troops out'?
Only Kucinich is advocating that.
Posted by: R seven on November 25, 2003 08:42 AMBecause I don't think he'll have the fortitude to stick it out.
Posted by: Steve on November 25, 2003 09:12 AMI think that the real problem in this election is that there really isn't a fiscally conservative option...the Democratic candidates are lining up to repeal the Bush tax cut, which Antler does show to have been an effective means of stimulating the economy, but they also have proposals to spend most of the windfall from the repeal on goodies like universal health care. There isn't really a candidate that wants to look at gov't. spending as the main problem with our economic prospects.
Also, both parties seem to have become dumb and dumber on the free trade issue...
WASS...We are so screwed!
Posted by: Clay Ranck on November 25, 2003 09:50 AMAs sad as it is, I agree on the current "porkiness", and I have no solution for it in mind (other than to take out every politician who voted for pork and shoot them as examples to the few who might survive).
That said, imagine how much worse it would be in the Socialists (the Democrats) were running things! The Medicare thing? They're complaining that it's not BIG ENOUGH! Same about some other stuff... Hello?!? Imagine how much worse that would be.
It certainly would be nice if some of the pols would give up on rectal spelunking and go back to doing they're freaking jobs.
Posted by: Deoxy on November 25, 2003 10:50 AMACK! So worked up I used "they're" for "their"!!!
You know it's bad when you commit your own pet peeve...
Posted by: Deoxy on November 25, 2003 10:52 AMDeoxy, those mistakes are completely understandable on this site.
(Cue up music for DaveL to make the obligatory snide comment about my sprelling/grammar.)
As for the Republican/Democratic choice that is what is so depressing. The Democrats aren't offering a viable alternative from my point of view. If anything the Democrats are worse.
Posted by: Steve on November 25, 2003 11:08 AMAt least you didn't misspell "grammar" this time.
Posted by: DaveL on November 25, 2003 12:02 PMWhew...good, I was worried there I didn't check dictionary.com.
Posted by: Steve on November 25, 2003 12:04 PMDeoxy - if the Democrats were running things, the Republican minority would never let their big-spending bills get passed. They'd strike their limited government pose and go on TV and torpedo the damn things. Look what happened to Hillary-care, for instance. But let Bush propose the same damn thing and they won't raise a peep.
I've got a conservative friend who votes Democrat for precisely this reason; every good small-government conservative, he says, should want Republicans in the minority because that's the only place where they actually act conservative. Take them out of minority status and who will replace them as brake on goverment expansion? No one. Current events seem to be proving him right.
Right-wingers for Dean!!!
Posted by: Brian on November 25, 2003 02:29 PMWell, like I always say: both the democrats and the republicans mouth fealty to the same outmoded theories (deficits bad, surpluses good, yadda yadda yadda), but the fortunate thing is that the republicans are much more irresponsible about practicing what they preach.
The fact is, the surpluses of the late 90s (governement surplus = destruction of private sector wealth) were directly responsible for the subsequent recession. The only way to rectify the situation was to restore the private sector balances by running a large deficit. If Gore had won, he probably would have done a Hoover-type dithering fiscal stategy, as small to moderate deficits caused by weak growth would have proven insufficient to reduce the fiscal drag. That was, in essence, the story of Japan in the 90s - surpluses during the "bubble years" of the late 80s drained private sector wealth and created a recession (and too-high taxes continued the surpluses all the way to 91), and halfhearted public works spending was never enough (because of concerns over the "deficit") to do the job, at least until recently when the government stopped giving a damn (a few years of record deficits (7%+ of GDP) while interest rates stayed comforatably in the 0% range convinced even some of those notorious dimbulbs, economists, that their "crowding out" thesis was, ahem, flawed) and ramped up deficits to 9% of GDP.
Bush, however, was so intent on his tax cuts that he didn't let himself get scared by the deficit. And so he got us up to the 5% of GDP number we needed to replace the private assets lost to the surplus, and now it looks like we're ready to go to town. Of course, he and his advisors still think it's all to do with tax cuts themselves, and not the balanceing out of demand and supply created by the deficit, but a flawed economic theory that produces results is better than a flawed economic theory that doesn't...
Posted by: jimbo on November 25, 2003 02:59 PMThe alleged 'drag' of the federal fiscal surpluses evidently hadn't hit as of 4Q1999, which saw a sizzling gdp growth rate of 5.8% or more, iirc.
However, such a hot growth number, coming at that late date in the record long recovery, coupled with the 3.9% unemployment number, caused the Fed to imagine a return to inflationary pressures from economic bottlenecking (although little signs of inflation were present). Accordingly, the Fed made a pre-emptive strike on what they thought was the incipient inflation, with several (4?) rate hikes in a row.
It would appear the actual proximate cause of the brief recession was not any fiscal drag, but instead the Fed's paranoic tightening of monetary policy.
