record deficits

[Thanatoast]

whole story (http://story.news.yahoo.com/news?tmpl=story&cid=530&ncid=530&e=5&u=/ap/20040107/ap_on_go_ca_st_pe/bush_deficits)

Snow said that instead of rolling back the tax reductions, which Democrats contend have gone overwhelmingly to the wealthy, they should be made permanent. He said if the 2001 and 2003 tax cut bills had not been passed, 109 million taxpayers would face tax bills this April 15 that would be on average $1,544 higher.

"Let me be perfectly clear: Failure to make the tax relief permanent would be a huge mistake and would put our recovery in jeopardy," Snow said in prepared remarks to the U.S. Chamber of Commerce (news -web sites).

"With adoption of the president's policies, our projections show a solid path toward cutting the deficit in half, toward a size that is below 2 percent of GDP (news - web sites), within the next five years," Snow said.

In the new budget the president will send Congress on Feb. 2, the administration is expected to propose limiting the growth of discretionary programs to 4 percent, perhaps excluding defense and domestic security.

The administration has faced recent attacks from conservatives unhappy over a surge in government spending since Bush took office.

While Bush has emphasized repeatedly the need to rein in spending, overall federal expenditures have grown to an estimated $2.31 trillion for the current budget year that started Oct. 1. That is up 23.7 percent from the $1.86 trillion spent in President Clinton (news - web sites)'s final year, a rate of growth not seen for any three-year period since 1989 to 1991.

Much of the increase stems from the fight against terrorism and wars in Afghanistan (news - web sites) and Iraq (news - web sites). Also expanding relentlessly have been huge programs such as Social Security (news - web sites), Medicare and Medicaid, which grow automatically with inflation, higher medical costs and more beneficiaries.

Even the conservatives are starting to question why discretionary spending has leaped by a third.

It's depressing that the administration wants to hold discretionary spending growth to four percent, except for defense and security of course. :o The only ones winning the war on terror are the defense-related corporations. The hype is there only to keep the dollars flowing. How long will the American people fall for the crap being put out by the administration?

And then there's the line about repealing tax cuts will result in an average $1500 increase in taxes. Is this kinda like the average $1500 dollar cut everyone got? Did anyone here get $1500? I certainly didn't. I thought that "average" myth was dispelled ages ago.

Just more of the same BS from those in charge.

[zimv20]

Originally posted by Thanatoast
I thought that "average" myth was dispelled ages ago.


if we, as a country, were better educated, we'd know to ask for things like the median and standard deviation, instead of assuming we're all at the middle of the bell curve on the meaningless 'average' calculation.

[yamabushi]

Tax revenue projections are easy to bias towards favoring your particular political motivation. It really is just a fabrication to match what you believe others want to hear. Most respected economists predicted that the tax cuts would be either irrelevant or slightly detrimental to the U.S. economy. The drain on the economy would be primarily due to increased interest on current deficit spending. In other words, somebody has to eventually pay for these government expenditures. The more the payments get delayed, the highter the total interest burden on future taxpayers.

From a fiscal standpoint certain expenditures have the potential to increase future tax revenues which can offset this increased burden. Military spending does not happen to be of this type unless you somehow manage to gain access to resources that you would not otherwise have. This is not to say that such spending is not necessary, just that it does not help the economy to grow.

[zimv20]

Originally posted by yamabushi
Military spending does not happen to be of this type unless you somehow manage to gain access to resources that you would not otherwise have.

cheap oil, for example

[yamabushi]

If the extra military spending to acquire access to an amount of cheap oil is greater than the tax revenue gained from economic growth directly resulting from reduced prices for oil for companies and consumers in your country then there is no economic benefit from such military operations. It is debatable whether or not this is the case with Iraq since it is notoriously difficult to isolated individual economic factors that promote growth. I would however guess that there is no economic benefit for the U.S. for engaging in war in Iraq.

It is however quite possible for individual parties to benefit greatly from miltary actions and spending, such as Halliburton, even though the overall effect reduces economic growth in the U.S. It is not possible for us as outsiders to determine the real reasons why politicians make their spending and budget related decisions since we are not telepathic (at least I am not). However, based on the money trail we can certainly make a guess.


"Sure I got X amount of money from the Y Lobby, but that did not affect any of my decisions in office" - random politician