A Golden Calf of a Surplus
With the economy teetering on the fulcrum of recession, you'd think that our elected officials would start talking sense, but Democrats and Republicans alike seem caught in the traps of their own opportunism.
George W. Bush crows about the tax cut being "fair" and "broad," even though almost 40 percent of its benefits go to the richest 1 percent of Americans.
And Democrats blame him for squandering the surplus. But they should not make a golden calf out of surpluses. That's Hooverism, and it's especially dangerous during an economic downturn.
This kind of talk will only bind Bush's hands, and those of Congress, if we do tumble into a recession. One of the only ways out is for the government to spend more money, but if both parties pray at the altar of a balanced budget, then it'll be harder to break the economy's fall.
I'm an old-fashioned Keynesian; I believe in the utility of deficit spending. And spank me if you want to, but I'm one of those lefties who thinks a tax rebate is actually a good idea. My main problem with Bush's--other than its function as wrapping paper later on for a huge present to the rich--is that the rebate should have reached the working poor, who not only need it the most but who also would inject it more quickly into the economy.
The Democrats and the Republicans have distorted the problem of a budget deficit for so long that the distortion is taken as reality. But the United States can run a deficit without risking anything untoward. We're the strongest economy in the world, and our debt as proportion to gross domestic product has been shrinking steadily for years now.
Running a deficit, especially in economic downtimes, makes sense, but few politicians seem to have the courage to say so.
For my part, I'm less concerned that Bush has squandered the surplus than what he's squandered the surplus on--doling out $30 billion in tax breaks to energy companies and giving the Pentagon an $18.4 billion increase next year so that U.S. defense spending will reach $343billion.. (That's more than three times Russia's, China's, Iraq's, and North Korea's combined.) It takes some gall for Defense Secretary Donald Rumsfeld to say that the Pentagon needs "every nickel" of that $18.4 billion increase. That's a lot of nickels.
Meanwhile, we still have 40 million people without health insurance, homelessness is on the rise, and millions of Americans go to soup kitchens for their meals.
Bush's priorities are out of whack, but so, too, are the Democrats' prescriptions.
So long as they buy into the false notion that the budget must be balanced, Democrats will be shortchanging the least among us.