Public Nuisance |
|
|
Random commentary and senseless acts of blogging.
The first Republican president once said, "While the people retain their virtue and their vigilance, no administration by any extreme of wickedness or folly can seriously injure the government in the short space of four years." If Mr. Lincoln could see what's happened in these last three-and-a-half years, he might hedge a little on that statement. Blog critics Gryffindor House Slytherin House Ravenclaw House House Elves Beth Jacob Prisoners of Azkaban Muggles
Party Animals:
Jewish Bloggers Join >>  
|
Wednesday, July 16, 2003
Lying is so habitual for the Bush boys that they can't even hold themselves to one lie per story. In projecting a deficit of $455 B for the current fiscal year (the projection a few months ago was only $305 B, another lie), the White House is lying since the numbers don't include the cost of the war or the ongoing occupation of Iraq and Afghanistan. The actual numbers for this year and the next will likely be over $500 B each. At the same time, OMB director Joshua Bolten said: White House budget director Joshua B. Bolten labeled the new deficit figures "a legitimate subject of concern," but he called the red ink "manageable." He offered no new proposals to bring the budget back into balance. "Restoring a balanced budget is an important priority for this administration," he said, "but a balanced budget is not a higher priority than winning the global war on terror, protecting the American homeland, or restoring economic growth and job creation." In other words, the White House has put out a budget number that doesn't include the cost of the war - and then blamed the war expenses that they aren't counting for the size of the deficit.
During Bush's first months in office, the White House projected a $334 billion surplus for 2003. Of the $789 billion swing to a $455 billion deficit, Bolten attributed 53 percent to the economic downturn, 24 percent to war, homeland security and other new programs, and 23 percent to the three successive tax cuts enacted since 2001. 53% of 789 is 418. So Bolten is now claiming that from the weak economy alone, we would now be running a deficit of $74 B. But when the OMB was trying to sell the original 2001 tax package, they stressed that a weak economy was no threat to the surplus. In fact, Bush's earlier OMB director, Danials, was speculating that his claim that the government could pass the 2001 tax package and still have $1 trillion or more surplus, after excluding the SSI surplus, might well be overly pessimistic:
Q How concerned are you -- one other thing Democrats continually mention is that this was built on a house of cards, because the surplus won't materialize because the economy is going to tank. How concerned are you that the economy is going to tank and that will affect your surpluses? MR. DANIELS: Well, we're not concerned about the economy tanking. We think that the economy is struggling along at the moment with unacceptably low growth, but at least it's still growing. The heart of your question really is how secure are these long-term forecasts. And the answer to that is, that they are necessarily uncertain. They could just as easily be wrong on the low side as the high side. I refer you to CBO for whom $5.6 trillion is the midpoint estimate. They have estimates as high as $8 trillion. And what I can tell you about the economy is that even a substantial recession in this year, which does not seem to be in prospect, would hardly move the needle over 10 years. In order to really change the 10-year projection, you would have to have a sustained, slow-growth period on the order of 1 or 2 percent lower growth than the 3.2 percent that we forecast.
Q Mitch, if, in fact, your estimates of surpluses are below the mark and there is more money on a yearly basis, can you describe for us the priorities of the administration as to what's to be done with that extra money? Is it to be devoted entirely to tax cuts? Is there a formulation -- one-third, one-third, one-third more -- whatever? What would happen, based on your conversations with those involved, in charting the future with that extra money? MR. DANIELS: I think it's premature to say. It's a very valid question because, again, the chances are at least as good that revenues and surpluses will be higher than expected, not lower. They've been higher for five straight years. And that pattern could continue. So it's a question that could arise. Here is what Bush said at the same time:
Tax relief is central to my plan to encourage economic growth. And we can proceed with tax relief without fear of budget deficits, even if the economy softens. Projections for the surplus in my budget are cautious and conservative. They already assume an economic slowdown in the year 2001. Even if the slowdown were to turn into a recession similar to that of 1990 and '91, the Congressional Budget Office projects that the 10-year surplus would shrink by only 2 percent, from a little more than $5.6 trillion to a little less than $5.5 trillion. Two percent, one hundred twenty percent - hey, no major difference. Just some of that fuzzy math.
Update: Those inaccurate economic predictions are obviously the fault of George Tenet, who failed to warn Bush that his programs would actually cause massive deficits, as Oliver Willis explains.
|
