liberal ["liberalis" L - suitable for a freeman, generous; "eleutheros" Gk - free] (adj) generous, open-minded, not subjugated to authoritarian domination; (n) one who believes in liberty, universal suffrage and the free exchange of ideas. elite ["eslire" Fr -- to choose fr.L "eligere" -- choose] (n) the choice part; best of a class; the socially superior part of society.

Tuesday, January 25, 2005

Honest

The Economic Policy Institute's "Job Watch" reports that there is a discrepancy between the predicted and the actual results of the Bush Administration's 2003 Tax Cut "stimulus" package. Who should we turn to to help us make good common sense out of all this gobbledeegook? Let's turn to our Congressional majority leader, Tom DeLay to zero in on the truth in all this.

“President Bush and the Republican Congress’ economic policies are not just intellectually and ideologically superior – they get the job done,” DeLay said. “The evidence today – actually, the evidence of the last 16 months – proves our policies have created more jobs and grown the economy by ensuring those who earn a paycheck get to keep more of it.

“I’m not one to say ‘I told you so,’ but the numbers don’t lie,” DeLay said.


The numbers may not lie, but somebody else may!

What do the numbers actually say?

  • All 157,000 jobs created were non-farm

  • That number is a 32,300 decline from the average of the prior 3 months

  • Right about even with the prior six month average

  • Down 16,500 from the prior 12-month average


Okay, so that represents an increase of 2,230,000 jobs over December of 2003. Good.

Unfortunately, the unemployment rate is about 1-1/2% above what it was four years ago.

All this "superior" economic policy, would be bringing us in just below the break even point as Bush begins his second term, if that were the whole story. But it isn't.

    The Budget Deficit

The Congressional Budget Office's (CBO's) new baseline projections indicate that if current laws and policies did not change, the federal budget would run a deficit of $368 billion in 2005 and a smaller deficit, $295 billion, next year. After that, annual deficits would gradually decline, turning into a small surplus by 2012, assuming that various tax increases occurred as scheduled. Relative to the size of the economy, the deficit would equal 3.0 percent of the nation's gross domestic product (GDP) this year and 2.3 percent of GDP in 2006. By 2015, the end of CBO's 10-year projection period, the baseline surplus would equal 0.7 percent of GDP.



Today, the White House announced the 2005 budget deficit will be around $427 billion, or 3.5% of GDP.

Reuters adds, contrary to Tom DeLay's sunny predictions
White House spokesman Scott McClellan insisted on Tuesday that the Bush administration was still on course on its goal of reducing the deficit in half over five years by promoting economic growth and controlling government spending, although analysts are skeptical it can be done.


Bush is under pressure to bring down the budget deficit as a way of restoring faith in the dollar, whose tumble against other currencies is increasingly being viewed with concern in global capitals.


What McClellan didn't tell us is the information provided by the Center For Budget and Policy Priorities on Tuesday, January 25, 2005. The gist of the CBPP report is expressed in this quotation
The new Congressional Budget Office budget projections released today show that the nation faces a fourth consecutive year of substantial budget deficits. Some seek to portray “runaway domestic spending” or growth in the costs of entitlement programs as the primary cause of the shift in recent years from sizeable surpluses to large deficits. Such a characterization is incorrect. In 2005, the cost of tax cuts enacted over the past four years will be nearly four times the cost of all domestic program increases enacted over this period.

The new CBO data show that changes in law enacted since January 2001 increased the deficit by $504 billion in 2005. In the absence of such legislation, the nation would have a surplus this year. Tax cuts account for practically half — 49 percent — of this $504 billion in increased costs. Increases in program spending make up the other 51 percent and have been primarily concentrated in defense, homeland security, and international affairs.




In other words, the tax cuts Bush promised the American people would create jobs and stimulate the economy have done neither. The economy -- measured by the budget deficit and job creation figures -- would have been better off if Bush had done nothing at all!

Pelosi countered the Republican smokescreen with
Today's CBO projections confirm that President Bush and Congressional Republicans have completely abandoned fiscal responsibility. The last three Bush budgets have produced the three largest deficits in history, and now the CBO is projecting an enormous $368 billion deficit for 2005. That whopping figure does not even include the $80 billion President Bush will soon request for Iraq and Afghanistan or his $2 trillion proposal to undermine Social Security. And rather than addressing the problem, the President will deepen it by proposing a budget next month that seeks to add another $1.8 trillion in debt by extending huge tax cuts for the wealthiest Americans.

“The President set the bar low when he only committed to reducing the deficit by half by 2009, and Republicans are on a path of fiscal recklessness that fails to even meet that inadequate goal. Economists have warned that huge deficits are a drag on the economy that will eventually force interest rates up. If we do not act to restore accountability, then mortgages, car loans, credit card debt, and student loans will all cost more.

The truth is that every time Tom DeLay, Scott McClellan or George Bush talk about "growing" and "strengthening the economy," they really mean lining the pockets of the top 2% of earners and leaving the working class with the bill.

Although the average tax cut in 2001 was under $1,000, the average for the top 1% was over $50,000. It's no secret that Bush's advisors have him running the economy into a swamp of debt. But "honest Tom" doesn't have anything to say about it in his statements. All he does is praise the "intellectual superiority" of the GOP policies! As employment stagnates at pre-Bush levels, the Republican "stimulus package" hands over the public's money for education, infrastructure, health, retirement and unemployment benefits, and research and development to 1) the rich and 2) the largest corporations, especially those with military contracts.

Kos summed it up neatly in his post yesterday.
According to Norquist's plan, you starve the beast by creating budget deficits so high that government spending has to be slashed. So Bush got the "record deficits" part right.

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