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Archive for Saturday, January 11, 2003

Bush must be a magician

January 11, 2003

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We found out something new about our president this week when he announced his plan to boost our lackluster economy. He is not just a businessman turned politician, he is also, apparently, some kind of magician.

How else could he accomplish the feat of cutting taxes by $670 billion over the next 10 years when the nation is on the verge of having to pay for a very expensive war on foreign soil? Where is all that money going to come from? Is he going to pull it out of Alan Greenspan's ear?

Nope. We all know how he's going to pull off this economic sleight of hand -- he's going to spend a lot of money that the government doesn't really have and pawn the debt off to future generations. Deficit-shmeficit.

A hefty part of the proposed tax cuts (a whopping $300 billion) would come from the elimination of personal income taxes on corporate dividends. This would chiefly benefit relatively well-off people who are heavily invested in the stock market (as opposed to those of us who have our money heavily invested in keeping a roof over our heads and food in our bellies.)

But don't worry -- the dividend cut will encourage reinvestment in business, which will rev up the economy, which will create jobs, which will benefit every American. A rising tide raises all ships. At least that's the theory.

However, the dividend cut comes with no strings attached. There is no telling how much of that money will actually be reinvested in the business world so there is no way of knowing how much of it will actually trickle down to the great unwashed.

Now don't get me wrong. I'm not opposed to tax cuts, and I understand that rich people pay the most taxes and therefore tax cuts tend to favor the wealthy. I just wonder whatever happened to the concept of fiscal responsibility.

As far as I'm concerned you can't call yourself a conservative (even if you preface the title with innocuous prefix "compassionate") if you preside over an economic plan that would result in running up an already out-of-control national debt into even higher levels of the stratosphere in order to soften the short-term blow of a natural downturn in a cyclical economy.

So why is our Republican president cutting taxes when we are already on the verge of "blowing a hole" in our national budget on a costly military engagement in Iraq? I hate to say it, but the only answer that seems to make sense is that there is an election coming up in two years (a very short time in modern politics) and the current President Bush does not want his shot at a second term to be derailed by his perceived inaction while the national economy founders. In other words, he does not follow in the footsteps of his father.

Actually, with his get-tough military approach and his supply-side economics President Bush seems to be following in Ronald Reagan's footsteps. That's not all bad -- the '80s were a blast. A lot of people got rich and we roughed up a few international outlaws who desperately needed it. But once the party's over we're going to be faced with a financial hangover that our children's children will be living with long after we're gone.

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