Credibility Falls Faster Than Budget Deficit
Credibility Falls Faster Than Budget Deficit
Just how desperate is the Bush administration to come up with good news? This desperate:
President Bush used recent news about the budget deficit — this year’s deficit will be “$333 billion almost $100 billion less than earlier estimates” — to “[vindicate] his stewardship of the economy and budget.” The President then took advantage of the opportunity and stated, “It’s a sign that our tax relief plan, our pro-growth policies, are working.”
Despite the President’s self-congratulatory words, economic analysts have reached a totally different conclusion. While maintaining that “the trimming of the deficit is certainly a positive development,” they repeated the fact that “consensus among economists and financial analysts, and the empirical data, are strongly consistent with the basic, common-sense notion that tax cuts do not pay for themselves.” And, after taking a big picture on the economy, the experts found that “the reduction in this year’s deficit from a very large one to a large one has little bearing on the nation’s shaky long-term fiscal foundation.”
No wonder nearly half of Americans are giving President Bush negative marks on “being honest and straightforward.”
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Ha ha! I used that exact same photo, altered to show the “Credibility Deficit”, here.
July 14th, 2005 at 11:06 amGreat! Instead of an apalling deficit, we have just an alarming deficit. Now I feel a little better about things.
July 14th, 2005 at 11:21 amSometimes their lies warrant no more than a laugh. Disgraceful.
July 14th, 2005 at 11:26 amTheir lies have sunk the country. They’ll be happy to blame everyone else but themselves. But that’s how deception and lying works. Rove has honed this to a very fine art. Its disgusting, really.
July 14th, 2005 at 11:45 amI should expand on this just a little.
I do business overseas. Pre-Bush, everyone I dealt with were happy with us Americans and there were very few issues.
Post-Bush, I get innundated with questions about Kyoto, Iraq, North Korea, BushCo, fundimentalist Christians, and SUV drivers. Seriously. There are even times when asked that feel the need to explain that I’m Canadian. As much as I hate to say it, this “pro-business” pResident has made it harder to actually do business.
Very strange. Love is Hate. Peace is War. Truth are Lies. Such strong Christian values, these. :-(
July 14th, 2005 at 11:50 amha ha ha……..bu$hies cannot tell the truth!
July 14th, 2005 at 12:15 pmSo this year’s budget deficit is only one and a half Iraq wars.
July 14th, 2005 at 12:18 pmOr better yet, it’s equal to 40% of what Bush’s tax cuts have cost us so far. Through fiscal year 2005, the Bush tax cuts enacted since 2001 have cost $819 billion.
Isn’t math fun?
July 14th, 2005 at 12:38 pmJCGoW,
You are so right. I work with folks in Germany, India and the UK and they are all puzzled to put it politely. They clearly see what a shambles our once great nation is in at this point in time. It’s maddening for us, but for the fat cats (and I do not exclude the Dem enablers of this Republican charade) they are (in the inimitable words of Eddie Murphy) making ends meet like a motherf%$^&. Ugh.
July 14th, 2005 at 12:41 pmTax rates were cut, and revenues increased. Even if the two are not related, it’s 2 pieces of good news.
Now let’s simplify the tax code to cut down on the $200 billion of compliance costs. I honestly believe a bi-partisan effort could accomplish quite a bit in this arena.
July 14th, 2005 at 1:01 pmTony, most of those “complianc costs” are to lawyers and accountants so businesses and people can weasle out of paying taxes. Those groups are going to continue to employ accountants and lawyers till the tax code has no deductions at all. One (simplification) won’t reduce the other significantly until you address deductions. Are you ready to write off mortgage interest deductions?
July 14th, 2005 at 1:59 pmAmazing..Republicans tried to force feed us “Reaganomics” in the 80s. Then in the 90s, they rename it “supply-side” economics, but still had little success with it. Now they are going to start calling it “Bushonomics”, and hope that the public will swallow the same bitter pill for yet a third time in 30 years. And Tony seems to want a glass of water to wash it down with.
Tax cuts don’t pay for themselves, especially not in a time of war when our expenses are through the roof. Thanks for the offer of the “new” pill, though. I’m not swallowing it.
July 14th, 2005 at 2:19 pmkindness, heck yeah, I’ll give up the mortgage deduction (I am a homeowner, btw). If all deductions/loopholes are eliminated, the tax rates can drop accordinly for everyone. But it only works if they are all eliminated. And you would have the benefits of: less compliance costs and less weasle-ing, which is mostly done by the rich.
July 14th, 2005 at 3:49 pmAnother point I’d like to make is that the US economy is so complex that I don’t think either party can prove simplistic hypotheses like “tax cuts pay for themselves” or “the minimum wage was no effect on unemployment”.
For the tax cut hypothosis, the only way to prove it would be to have a “control” economy, which would be the same as the US economy except without the tax cuts. Then we could see if it was the cuts that spurred the economy and generated higher revenues, or if it was something else and that leaving tax rates higher would have generated even more revenue.
For the minimum wage hypothosis, you’d need the same control economy. When the wage was increased in the mid 90’s, the unemployment rate didn’t change much. But the economy was doing well, so it might have absorbed any negative impact. Perhaps the unemployment rate would have been even lower if the minimum wage was left steady. In the early 90’s, the min wage was increased but unemployment went up as well. However, there was a recession at the time. There’s no way to prove causation in either case.
The control economy is impossible to create, obviously. That’s why I think more emphasis should be placed on economic theory rather than simplistic “proofs” like these.
July 14th, 2005 at 4:01 pmtony, revenue dropped with the tax cuts. Look it up.
July 14th, 2005 at 4:13 pmcynical ex-hippie,
July 14th, 2005 at 5:31 pmYep tax revenue did drop initially. Was it due to the rate cuts? Or the recession/9-11? Maybe revenues would have been higher with no tax cuts. Maybe no tax cuts would have made the recession worse, thereby making revenues even lower. I don’t think anyone can conclusively prove any of these scenarios.
Well Tony, I don’t know about you, but I for one am not going to play armchair economist.
July 14th, 2005 at 5:40 pmI speak as a nonpartisan person (I’m not even american, you see) with some knowledge on economic theory.
I think Tony is partly right when he says simplistic hhypotheses cannot be proven, but that’s not because they are simplistic. That would be because economists (even good ones)are usually horrible in making predictions on what the outcome of policies will be, and globalization made it far worse. Economists learned to be, as this post seems to point, very good at masking data to make it more appealing to the public.
The drop in the US deficit could be cause by a number of reasons other than tax cut policies taking effect or even a general betterment of the economy. In the country where I live (Brazil), the government is forced to present surplus by the IMF because of the contracts our government signed. And when this surplus cannot be attained by economic growth, the State would just spend less on social welfare. And it doesn’t matter if they are cutting on social programs to obtain results, they are passed to the media as a positive thing. And people buy it.
July 14th, 2005 at 6:07 pmTony, no you say no one can conclusively prove the scenarios, after you made an assertion to that very point.
What we can say, is the US economy has grown just fine since WWII, with tax levels much higher than they are now.
July 14th, 2005 at 7:40 pmcynical ex-hippie,
Where did I make such an assertion?
Also, your second comment is subject to the same fallacy. Perhaps the economy would have grown even better with lower tax rates. Or, perhaps it would have grown even better with higher tax rates. We’ll never know.
July 15th, 2005 at 8:43 amWow, someone else made the same point I did!
No, that is not me. I have hair and do not wear Charles Nelson Reilly glasses.
July 15th, 2005 at 8:46 amJCGofW and Jay,
I do not work or do business over seas but I do talk to a lot of American people on a daily basis.
I’m petitioning my governor so I have taken to the streets for signatures.
My petition is about education but almost every conversation I have with people quickly turns to what a BAD President Bushie is.
People on the streets are dying to complain openly and are glad they have myself and my crew to vent to.
People whom I’ve never met actually call me on the phone just to bitch about Bushie. It’s wonderful.
Mind you, the area I’ve been circulating my petition in is a Republican County.
I’m so proud of my fellow citizens, they have seen the light and admit they made a mistake when they voted for the criminal in charge.
In conclusion JCGofW and Jay, I think it is safe to say that WE know what people are feeling in this country and around the world. We have the power of the people on our side.
July 15th, 2005 at 12:09 pm