At 10:54 PM 8/28/01 -0700 Doug wrote:
>Well, let's see how much higher they get with the CBO projection that
>we're already going to have to hit up Social Security. If you follow
>the informal polls on CNN you may have noted that they normally favor
>the conservative viewpoint (as do most internet political polls that
>I've seen), but in today's quick vote "Do you think President Bush's tax
>cut was beneficial?" the result was No by 59-41%.
Doug, I'm glad you brought this up - because I was going to, but never got
around to it.
First, I think that this is a classic example of media incompetence. I
consider myself to be something of a political junkie, and I have yet to
see a mainstream news report open "the CBO announced today that the Federal
Government will be tapping surplus Social Security revenues that had been
earmarked for debt reduction to pay general expenses this year. Of
course, five years ago, this wouldn't have been news, as using extra SS
revenues for general expenses was par for the course for the first 20 years
that SS had extra revenues available. But, in the past several years of
the booming economy and booming surpluses, politicians of both parties had
promised unequivocally to not use extra SS revenues for anything other than
debt reduction - and now that promise is going to be broken, someone will
likely start paying a political price."
Secondly, the Democrats are practically hugging themselves over how good
this is for them - and the fact that they are getting away with it is yet
another example of media incompetence:
The budget for this year is the final budget of the Clinton Administration.
The major change to this year's budget was the tax rebates - something
President Bush did not iniitially propose, but was in fact insisted upon by
Democrats. (If someone is aware of another major Bush initiative that has
been signed into law so far for this year's budget, please let me know.)
In fact, just two months ago, the Democrats were furious that President
Bush was taking credit for the tax rebates. Moreover, many Democrats,
including Tom Daschle, sponsored a bill that would have *doubled* the size
of the tax rebates. Using the CBO's models, this would have caused an
extra $40 billion of SS surplus to be taken away from debt reduction. Oh
yes, and let's not forget that Democrats just three weeks ago were trying
to greatly increase agricultural subsidies for this year. In short, the
notion that Republicans were responsible for taking money away from debt
reduction this year is simply ludicrous. Yes, you can definitely argue
that Republican budget productions for next year, and the rest of the Bush
Administration amount to pure fantasies at this point, but Democrats have
no one to "blame" but themselves for the current year's situation.
Finally I am deeply concerned that I can find *nobody*, at least nobody who
is making it into the mainstream press, who is arguing that this is A GOOD
THING.(*)
At the very, least the Democrats should be pleased by this turn of events.
After all, Democrats are ostensibly left-wing thinkers, and left-wing
thinkers are ostensibly sympathetic to Keynsian Economic Theory.
According to the Keynsian Econoimic Orthodoxy, large government surpluses
are a drag on the economy that reduces growth in GDP. Thus, during boom
times the government should try and run a surplus, and in recessions, the
government should run a balanced budget, or even a deficit - and thereby
help smooth out fluctuations in the business cycle.
_The Economist_ declared the global economy to be in recession this week,
and predicts that next week the Bureau of Economic Analysis will revise 2nd
Quarter GDP growth down to 0, or possibly even below zero. If it goes
below zero, there will then be almost no question that the US is in
recession under the most broadly used definition of a national recession.
In other words, if traditional Economics has any merit whatsoever, the fact
that the US government is running its SECOND LARGEST BUDGET SURPLUS EVER,
is about the *stupidest* thing that we could be doing right now. Right
now, devoting $198 billion to debt reduction amounts to nothing less than
Uncle Sam giving the economy a big push into recession. Indeed, given
that consumer spending is the one factor that has kept the economy from
going into free fall, the US government should immediately issue the
remaining surplus as a tax rebate. I estimate that for every person who
is receiving $300 under the current rebate, this would send each of them an
additional $1200. (Using the number of $40bil as the cost of the current
rebate program.) Yet, I can't find *anyone* who's even arguing that we
should spend this surplus as quickly as possible, let alone send out a
second rebate.
In my humble opinion, this is a classic example where bipartisanship is
detrimental to the country. Bipartisanship, after all, occurs when both of
the parties agree on something. Yet, when both parties agree, important
viewpoints that should at the very least be *considered* right now (even if
you disagree with them - which there are probably valid reasons to disagree
with them) aren't being heard at all.
JDG
* - O.k., o.k., the Bush Administration is being remarkably upfront in
recent days that the tax cut is having its desired *conservative* effect of
crimping Congress' potential for new spending. Thus, as a conservative I
am admittedly tickled pink that the surplus has been greatly reduced -
this, after all, is *exactly* what I voted for. This, however, is
admittedly quite an ideological position, so I am not including it here.
Moreover, it doesn't change the fact that even the Bush Administraion has
yet to go so far as to say that we should be send the rest of the surplus
back as rebate, or as additional spending.
__________________________________________________________
John D. Giorgis - [EMAIL PROTECTED] - ICQ #3527685
We are products of the same history, reaching from Jerusalem and
Athens to Warsaw and Washington. We share more than an alliance.
We share a civilization. - George W. Bush, Warsaw, 06/15/01
