An election-year farce Feb 5th 2004 | WASHINGTON, DC >From The Economist print edition
http://www.economist.com/world/na/displayStory.cfm?story_id=2410569 excerpt: If this all looks too good to be true, it is. For once, the administration has not fiddled the books by relying on unrealistically high growth rates in the coming years; but it has relied on other fibs. For a start, the budget does not factor in the future costs of keeping soldiers in Iraq and Afghanistan: even Mr Bush's own budget director says costs could be as much as $50 billion for Iraq alone in 2005. Then the usual implausible savings are found from "waste, fraud and abuse". Third, all the president's cuts are to fall on the one-fifth of the total budget that counts as domestic discretionary spending.hardly likely to happen in an election year. Mr Bush's most culpable failing lies in his refusal to think beyond the 2009 horizon. Take, first, the tax cuts of 2001 and 2003, which Mr Bush wants to make permanent at a ten-year cost, when other new proposals for tax-free savings schemes are added in, of $1.25 trillion. The cuts may well have provided a welcome economic stimulus at a time when confidence was knocked by recession and terrorist attack. But after 2009, these cuts will equal three-quarters of the total deficit, even by the administration's own numbers. This matters, because soon after that date, some very predictable things happen, thanks to a demographic bulge as the baby-boom generation reaches retirement. The surplus on government-retirement accounts, which currently subsidises federal spending by over $250 billion a year, will vanish. The costs of Medicare, the health programme for the elderly, will soar. Mr Bush has aggravated the problem by pushing through a Medicare prescriptions law whose ten-year cost has now jumped to $530 billion. The idea that Mr Bush will ever tackle these issues.even in a second term.looks fanciful. _______________________________________________ http://www.mccmedia.com/mailman/listinfo/brin-l
