Wait a Second - There's a Deficit!

It seems like the media is finally waking up to the fact that the Bush Administration's spending is out of control, and that its poor fiscal policies are resulting in dangerously large deficits. Granted, Paul Krugman has been trying to convey that message for quite some time, and again today he presents his explanation of Bush's tax policy:

What's playing out in America right now is the bait-and-switch strategy known on the right as "starve the beast." The ultimate goal is to slash government programs that help the poor and the middle class, and use the savings to cut taxes for the rich. But the public would never vote for that.

So the right has used deceptive salesmanship to undermine tax enforcement and push through upper-income tax cuts. And now that deficits have emerged, the right insists that they are the result of runaway spending, which must be curbed.

Newsday brings us news from the Congressional Budget Office:

Washington - While the nation's finances have deteriorated in the past six months, the federal budget still could be balanced in a decade if new spending is cut by two-thirds and if all the recent tax cuts are allowed to expire, Congressional Budget Office Director Douglas Holtz-Eakin said yesterday.

And that's a nonpartisan assessment. Ouch. In "Dangerous Deficits", the Washington Post picked up the story:

Because the budget office is required by law to ignore some likely costs, the more realistic scenario is that the federal government will spend about $5 trillion more over the next 10 years than it takes in.

In the face of all this, President Bush tells Americans that the deficit shouldn't concern them because he'll cut it in half in the next five years. This assurance is both hollow (the administration's glide path to that goal omits $200 billion in likely costs) and inadequate (even if the administration were to accomplish that feat, deficits would soon begin to mushroom as growing numbers of baby boomers hit retirement age.)

The Post then complains that "the Democratic presidential candidates look responsible only by comparison with the president" because, while promising corrective measures, none are making a balanced budget their priority. Similarly, USA today criticizes the Democratic Candidates, apparently for not promising huge tax increases and spending cuts as part of their campaigns, noting,

Whoever wins the Democratic nomination will go up against a president who is promising to cut the deficit in half by 2009. But Bush has yet to provide a credible plan for achieving that goal, particularly since government spending has exploded on his watch. Since he took office, spending is up 16%, or $300 billion a year, nearly enough to fund a second Pentagon.

Perhaps USA Today and the Washington Post don't recall that it is not good politics to promise painful cuts and tax increases, even if it is a foregone conlcusion that Bush's fiscal irresponsibility will ultimately force them to occur.

On a more constructive note, Robert Reich offers some suggestions as to how we can extricate ourselves from the fiscal mess the Bush Administration has created.

Meanwhile, while noting that Bush's "irresponsible fiscal policy harms business confidence and therefore job creation", the Washington Post tells us that a jobless recover is not such a bad thing:

Each worker can produce more, meaning that he or she can be paid more. Do the Democrats really mean to oppose that?

What an idiotic question - of course not. But perhaps the editorial board should take note of the fact that record worker productivity over the past year has been associated with a decline in the real dollar value of the American workforce. On the whole, only the executives have been getting raises.

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