Bush's Only Economic Plan is War!
I know, because David Gergen told me so. On the Charlie Rose show.
Nixon famously said "What this country needs is a good depression", but (busy with Watergate) ended up settling for stagflation.
Reagan's tax and spending policies impoverished the public sector - it looked like a permanent condition, but Bill Clinton and Bob Rubin spiked that - which earned them both the rightists' hatred and their fearful pseudo contempt. (That last is a natural for rightists.) Reagan's deregulation policies set the stage for media mergers, 'news less' press coverage, the rise of neoFascist talk radio and private censorship of music and commentary by Clear Channel and Bonneville (two companies who now own essentially all of US radio).
Inequalities of wealth and income have increased dramatically during these administrations, always denied or deemed temporary aberrations - until now, when the Shrubbyists have overtly said such increases in inequality are a desirable 'engine' of growth. Bush, paralleling Nixon, averred that ".. it would be easier if it were a dictatorship and I were the Dictator". He got his wish by putting Clinton's Homeland Security plan on ice, killing Clinton's initiative against Al Qaeda, and letting a terrible terrorist strike (which all experts regarded as inevitable, however unpredicted the details were) create the conditions both for his 'dictatorship' and the rightist program to increase conformity among the American people.
Shrubbyist Exxonomics and militarism have turned a budget surplus into a serious, structural budget deficit. Their current proposals will make this condition even more difficult to reverse. This will leave the public sector impoverished once again, with every expenditure for a public purpose competing with other worthy goals for dollars that are no longer there. Of course, military expenditures for the war (a war to dominate the world, not to protect the US from terrorism) will be sacrosanct.
These proposals also reduce the tax benefits of and incentives for charitable giving, so don't look for the 'non-profit' sector to take up the slack in delivery of social and public services. Unless of course they are 'faith based' in which case they can count on money from the Shrubbyist war chest - the Treasury Department.
With the budget in such a deficit the Federal Reserve will raise interest rates at the first sign of "economic recovery". But don't think this is recovery will be real, it will not be. A recovery of this kind measures growth in output, not jobs, wages, investment, or asset valuation (stocks, etc.). When we are operating at 75% of capacity (as currently), we can 'recover' a long way before we use the productive capacity available. During this kind of pseudo recovery productivity (output per unit of input), wages, and unemployment have been stagnant, and sometimes worsened. Because interest rates have increased, a 'credit crunch' develops, and investment in new and more productive technology is suppressed. High unemployment suppresses wages, reduces the relative cost of labor, and further reduces investment in new and more productive technology.
Of course rightist economists use the resulting slowing of productivity growth to recursively justify decreasing relative wage levels in a vicious cycle of inequality generating exxonomic ideology and policy.
Shrubbyist War Plans - Attack Progressive Tax System
The LA Times editorializes that "To avoid the economic abyss, Washington must resist the urge to pass a raft of tax cuts that would further enrich the wealthy while starving the government."http://www.latimes.com/news/opinion/editorials/la-ed-budget5feb05,0,9526.story?coll=la%2Dnews%2Dcomment%2Deditorials
The effects of the Reagan/Bush and Shrub deficits on the availability of money for any public purpose (other than war and spying on and suppressing domestic opposition) is surely apparent. Allen Sloan, of Newsweek, has more: "Bush’s Depressing Economy - Everything will work out just fine, the president says. But a close look at his economic record so far suggests that he has a ‘fuzzy math’ problem."
America's deficit, the world's problem
The essence of the matter appears to be that the strength of our economy, especially our labor surplus, productivity, and political and financial stability, lets us get away with importing cheap goods, and paying for them by selling our capital (productive capacity) at a price advantage. That price advantage is supported by the stability and dominance of the dollar. And especially by the relative "unattractiveness" of the developing economies as a place to invest - largely courtesy of "perpetual war" and social unrest over there. It is a pretty decent racket, if you can keep it going....
In California Governor Gray Davis, facing a massive $36 billion budget deficit, is pressing for an austerity budget for the current year in addition to the $10.2 billion in mid-year reductions which came in December.
Bush yesterday bet his reputation for economic competence on a massive
increase in military spending and a return to a level of government debt
not seen since his father led America in the early 1990s.
Bush's budget cuts Amtrak, local cops, EPA Among programs that would
bear the brunt: Amtrak and local police departments would face cuts in
federal subsidies. The Environmental Protection Agency would lose ground
to inflation, as would many social programs.
Shrubbyist fiscal 2004 budget request includes $6 billion for
Project BioShield, a plan to quickly make available vaccines and "treatments"
against biological agents such as smallpox, anthrax, botulinum toxin, ebola
and plague. (See "The
Place of Smallpox Vaccination in Biowarfare Strategy")
In 2003, It's Reagan Revolution Redux -- With his budget blueprint
for 2004, Dictator Bush appears to have stepped back from his "compassionate
conservatism" agenda and picked up the fallen standard of the Reagan
The Treasury's Department's No. 2 official, Ken Dam, announced his resignation
on Tuesday, a departure that comes as the agency gets geared up under a
Bush's $2.23 trillion budget for 2004 and its call for new tax cuts
was criticized by Democrats and got a mixed reaction from Republicans Tuesday
as the White House began defending its proposal on Capitol Hill.
Stealth Tax Reform (The Washington Post) -- "Lawmakers should
think hard -- about tax fairness, about the risk to workers and about the
cost to the Treasury -- before they rush to put Mr. Bush's plan in place.
His latest proposal is one more indication of his administration's recklessness
when it comes to the future fiscal health of the nation."
Tax Cuts and Red Ink --by Kent Conrad and John Spratt -- "We warned
two years ago that the president [sic] was betting his budget on a blue-sky
forecast and making his tax cuts so large that no margin was left for error.
Now we are watching 15 years of fiscal effort unravel...He did not even
mention the deficit in his State of the Union address."
Figures released by the Commerce Department last week show that US economic
growth slowed sharply in the fourth quarter of 2002, putting the world’s
largest economy on the brink of recession.