By INCITES BY ED SILVERSTEIN
It’s 1999, the height of the presidential campaign, and I’m having a familiar argument with a personal trainer at the gym.
He is certain that George Bush is being honest when he asserts that he can make massive tax cuts while still running a budget surplus. I, on the other hand, have a basic understanding of sixth grade math, so I knew such claims are a crock of horse manure.
Finally, frustrated by his constant parroting of dubious rationales offered by the (F)alse, (O)bnoxious, (X)enophobic news channel, I bet him a meal that, if Bush is elected, he will be running at least a $200 billion deficit within 4 years.
I admit, I was wrong. In less than five years, Bush has taken Bill Clinton’s legacy of a $1.5 trillion surplus and transformed it into a record $5 trillion deficit. $5,000,000,000,000.00!!! Of course, what can you expect from a president who likens his managerial style to a corporate CEO. The one that comes to mind is Kenneth Lay.
Just as Lay and other Enron executives made hundreds of millions on the backs of his unsuspecting employees and stockholders, Bush has enriched his corporate and wealthy donors at the expense of the average taxpayer and the poor.
Oh, I know, George blames the deficit on the recession, 9/11 and the war. But the truth is that the president has traded away our fiscal health to an assortment of industries that have filled Republican coffers. The energy and chemical industries, big agriculture and others had their loyalty rewarded with hundreds of billions in tax cuts. And then there’s the Medicare Prescription Drug scheme.
Bush claimed the plan would cost $370 billion, the maximum amount conservative Republican lawmakers were willing to support. The true estimate was $530 billion, but Bush officials had threatened to fire anyone who spilled the beans to Congress. To be fair, both figures were wrong. The actual cost is more than a trillion bucks. And the only seniors who will really benefit from the plan are executives of drug and health insurance companies.
Bush again showed his true fiscal colors when he made his case for war. The administration’s initial price tag for Iraq was $2 billion, with the reconstruction paying for itself. But that lie was too big for even gullible Bush supporters to swallow. The Bushies finally conceded that the war could cost as much as $80 billion, but castigated the Democrats for being unpatriotic with their estimates of $300 billion or more.
As usual, the Democrats were right. So far, we have spent some $280 billion and there is no end in sight. Some think the ultimate price tag will top $600 billion.
And where is this money going? A huge chunk is finding its way into the pockets of private defense contractors such as Haliburton. But despite billions in inflated single-bid contracts, these pork-fed greed factories were still not content. They added further to their bottom by over-billing taxpayers hundreds of millions, even as our troops were being killed and wounded as a result of inadequate armor.
So, should we be worried about these exploding deficits? Dick Cheney says no; “deficits don’t matter.” Of course, he’s still insisting that Iraq was involved in 9/11, supported bin Laden and has WMDs.
Economists (you know, those guys that go to school for this stuff and are constantly fired by the Bush Administration when they tell the truth) tell a very different story. One economist asserts that it took more than 20 years to get over the effects of Ronald Reagan’s deficits. And Bush’s are far worse.
Compounding this is that we have been exporting most of our well paying manufacturing jobs overseas. Now we are doing the same with lucrative service jobs. Add to this Bush’s union-busting policies, maxed out productivity increases, falling incomes and reduced taxation, and we are left with deficits that are going to be nearly impossible to pay off.
One bright spot is that China — the main beneficiary of globalization — has been using their massive trade surpluses to buy our bonds. This has kept interest rates low, but has made us more vulnerable to China’s will. This could be particularly troublesome in trade dispute negotiations or if China decides to formally annex Taiwan.
Should China get angry, they can pull out their capital and tank our economy with soaring double-digit interest rates. In addition, the increased cost of servicing the national debt at these higher interest rates could add an additional $3 trillion or more to the deficit. And with the government sucking up all remaining capital, there would be little left for business investment, which would cause severe economic stagnation. The government would have no choice but to raise taxes and severely cut services.
And there is an even worse scenario to consider.
If we are to believe the administration — “it is not a question of if, but when there will be a nuclear attack in the U. S.” — we have reason to be extremely concerned. Should such an attack occur in a major city, the damage could reach into the trillions, even tens of trillions. The stock market (with which the Bush administration would replace Social Security) could lose 50 percent or more of its value, instantly erasing trillions in wealth and plunging many into poverty. Saddled, as we already are, with massive debt, it is possible that this would be a blow from which we might never fully recover.
That is why Bush’s fiscal policies make no sense. On the one hand, he is warning us of catastrophic attacks, on the other, he is leaving us fatally vulnerable to such an attack. At best, it is wildly irresponsible, at worst, gross negligence.
Needless to say, I won my bet with the trainer. However, I never collected. He left town without paying and he owed me money. But I can’t say I was surprised. It’s the exact same thing that Bush is going to do. (Ed Silverstein)
Originally published in the Santa Monica Daily Press print edition on June 8, 2005. Read the original PDF.