WP op-ed: "No Shame, No Sense and a $296 Billion Bill"

[DeepModem Mom]

No Shame, No Sense and a $296 Billion Bill
By Robert J. Samuelson
Thursday, July 20, 2006; Page A23

For those who believe our leading politicians are utterly shameless, there was dreary confirmation last week. President Bush publicly bragged about the federal budget. Here's the objective situation that inspired the president's self-congratulation: With the unemployment rate at 4.6 percent (close to "full employment" by anyone's definition), the White House and Congress still can't balance the budget. For fiscal 2006, which ends in September, the administration projects a $296 billion deficit; for fiscal 2007, the estimate is $339 billion. How could anyone boast about that?

Easy. In February the administration projected a $423 billion deficit for 2006, so the latest figure is a huge drop. A skeptic might say that the first estimate was inept; some cynics argue that it was deliberately exaggerated to magnify any subsequent improvement. Naturally the president had a different story. The shrinking deficits, he said, proved that his tax cuts are working. The economy is great; the budget benefits. All around Washington, Republicans staged media events to hug themselves for their good work.

The tendency for politicians to claim credit for favorable news is as natural as flatulence in cows. Still, the Republicans' orgy of self-approval amounts to a campaign of public disinformation. It obscures our true budget predicament. Let's go back to basics. Here are two essential points.

First, budget deficits are not automatically an economic calamity....What truly matters is government spending. If it rises, then future taxes or deficits must follow. There's no escaping that logic. The spending that dominates the budget is for retirees....Second, the budget should be balanced -- or run a surplus -- when the economy is close to "full employment," as it is now. Balancing the budget forces politicians to make uncomfortable choices. Which programs are sufficiently needed or popular to justify unpleasant taxes? Balancing the budget also lightens the debt burden. One figure Bush doesn't praise is the annual interest payment on the growing federal debt. Even by White House estimates, it will rise from $184 billion in 2005 to $302 billion in 2011....

http://www.washingtonpost.com/wp-dyn/content/article/2006/07/19/AR2006071901789.html?nav=hcmodule

[Cha]

1. "As natural as flatulence in cows"..AND

BULLS!

[hadrons]

2. "For those who believe our leading politicians are utterly shameless"

this can apply to editorial boards too, so how long will it be before the WP editorial board is back to licking Bush's nutsack?

[Lasher]

3. Where to begin?

I hope Samuelson is not quite as silly in all his articles. He cites the current 4.6% unemployment rate as "...close to "full employment" by anyone's definition...". I don't agree, so he's wrong. The 3.8% that Clinton delivered in 2000, which Samuelson should have mentioned but did not, is a figure that is closer to full employment.

Another important factor he ignores is the ongoing replacement of higher paying jobs with lower paying ones, and the resultant negative impact on government income. And more importantly, he fails to consider the effect that tax cuts have had on revenues. In fact, he doesn't mention revenues even once in the entire article.

Apparently unaware that a reduction of income could have just as much potential to cause red ink as an increase in spending, our hero moves on with his explosion of ignorance (Part of the following paragraph is included in the OP):

What truly matters is government spending. If it rises, then future taxes or deficits must follow. There's no escaping that logic. The spending that dominates the budget is for retirees. Social Security, Medicare (health insurance for those 65 and over) and Medicaid (partial insurance for nursing homes) already exceed 40 percent of federal spending. As baby boomers retire, these costs will explode. Unless they're curbed, they'll require tax increases of 30 percent to 50 percent over the next 25 years.

Bless his heart. No escaping the 'logic' that deficits must follow rises in government spending? What if there is a corresponding increase in revenues? Oh but now we get into more familiar territory: Since the problem is spending, and since most of this spending is for retirees (quite a broad statement, with which one could reasonably disagree), then our only way to salvation is to gut our social programs! And it's the Boomers' fault! And if we don't, we'll have to increase everyone's taxes by as much as 50%! Puh-leeze! All we need is is a fair, progressive tax structure. Junior, Poppy, and Saint Ronnie of Ray Gun all did their part to dismantle just such a structure, but Clinton did what he could to repair the damage.

I wonder if he thinks all Social Security spending is for retirees?

Oh, and here's one of my favorites:

Democrats screech: Spare Social Security and Medicare. But Social Security and Medicare are the problem.

Not even a problem but the problem. Of course it is, if you think there's not been nearly enough transfer of wealth from the middle class and poor to the wealthy elite. How about that defense spending, Robert? Think it might be just a tad high, at 10 times the next biggest spending nation? Guess not.

And there's this one:

Just as Republicans now say their policies have cut deficits, Democrats contend their policies produced budget surpluses from 1998 to 2001. Nonsense. Those surpluses resulted mainly from the end of the Cold War (which lowered defense spending) and the economic boom (which created an unpredicted surge of taxes).

Come on out and say it, Robert: Saint Ronnie single-handedly won the Cold War, and as a result of this and other miracles, deserves all the credit for the Clinton-era prosperity - including the surpluses. Isn't that what you want us to believe? Did you know that Clinton increased taxes for higher income earners? Think that might have had something to do with the "...unpredicted surge of taxes..."? Hey, I think he tried to mention revenues!

The Cold War ended on December 26, 1991, according to a certificate I got from Rummy, and Clinton took office in 1993. And yet total federal spending increased 4.3% during Poppy's last year.

This is nothing but another uninformed attack, with a little lipstick, on our New Deal social programs.