NYT rains on Bush's deficit celebration: increased revenue = income gap

[DeepModem Mom]

Editorial
Another Mission ‘Accomplished’
Published: July 11, 2006

The release of the White House midsession budget review is an annual event normally marked by a few wonkish observations and the routine updating of various spreadsheets, not by a full-dress presidential dog-and-pony show. But President Bush plans to preside today, with members of Congress and invited guests in attendance. By all indications, including his own in his weekly radio address last Saturday, he plans to turn this into a celebration — just in time for the fall campaign.

This is proof, if anyone still needs it, that this administration is desperate for something to boast about. On Mr. Bush’s watch, triple-digit budget surpluses have turned into annual triple-digit budget deficits. There’s no information in the midsession report to alter that utterly dispiriting fact....But Mr. Bush is likely to gloat, anyway. Earlier this year, the administration conveniently projected a highly inflated deficit of $423 billion. With that as a starting point, the actual results can be spun to look as if they’re worth cheering.

The razzle-dazzle won’t end there. As he did in his remarks on Saturday, Mr. Bush is sure to use today’s event to credit tax cuts for a projected "surge" in tax revenue....Much of the increase in tax receipts is from corporate profits, high-income investors and super high-earning executives, sources that are just as unpredictable as the financial markets to which they’re inevitably linked.

So, the revenue surge is neither a sign that the tax cuts are working nor of sustainable economic growth. A growing number of economists, most prominently from the Congressional Budget Office, point out that upsurges in revenue are also the result of growing income inequality in the United States, an observation that is consistent with mounting evidence of a rapidly widening gap between the rich and everyone else. As corporations and high- income Americans claim ever more of the economic pie, revenues rise, even if there’s no increase in overall economic growth.... It would make sense to use some of the windfall revenue to enact policies and programs that tilt against growing inequality. Unfortunately, (George Bush is) flogging more tax cuts that will deepen the divide.

http://www.nytimes.com/2006/07/11/opinion/11tues1.html

[eppur_se_muova]

1. HA ha ! nt