Posted on 09/10/2004 2:57:58 PM PDT by Willie Green
For education and discussion only. Not for commercial use.
President George W. Bush's call for additional tax cuts raises questions about whether the economy has really reached a point of self-sustaining recovery, or is simply lurching forward under the influence of stimulants. Taxes have been cut three times since 2001. According to the Congressional Budget Office, the estimated budget deficit will be $422 billion this year, $348 billion next year and then stabilize around $275-280 billion every year for the rest of the decade. This is a radical turnaround from the $236 billion surplus of 2000.
Cutting tax revenues further in the face of such large budget deficits can only be considered an act of desperation to keep an economy moving in the face of negative structural problems and imbalances that have not to date been addressed. The largest of these sources of instability is the ever-expanding trade deficit, which at the current rate of $600 billion this year is draining vigor out of the economy faster than fiscal and monetary stimulus can offset its effects.
Commerce Secretary Don Evens' proud citation of 81,000 manufacturing jobs "created" this year, in a sector that has been counting job loses in the millions, is so lame it is doubtful that even administration officials believe it heralds a recovery. Indeed, administration spokesmen have taken to using the term "economy in transition," which means that President Bush has no plan or intention of helping American manufacturing become more competitive or regain lost jobs. Production will simply continue its "transition" into foreign hands. The fragile nature of the economy is sensed by the public and should play a major role when votes are cast in the industrial battleground states.
The presidential election will, however, turn as much on issues of national security as on economic policy. But the two are not unconnected. President Bush is in trouble over Iraq because not enough planning and resources went into the conduct of the campaign that followed the initial successful invasion. The decision to make only a minimal effort in Iraq was influenced by the need to keep spending down in a budgetary environment already rendered extremely tight by the tax cuts.
Though Federal spending has increased substantially in the last three years, it has not gone primarily to the Pentagon. According to Alison Fraser of the Heritage Foundation, "From 2001 to 2003 total spending grew by 16 percent. Certainly the terror attacks of 9/11 placed additional demands on spending for homeland security, a strong defense, and rebuilding lower Manhattan. However, these sums account for less than half of the new spending that has occurred since 9/11." If one calculates $470 billion for defense (including supplements for military operations) and $30 billion for homeland security, that still only amounts to 22% of the 2005 Federal budget.
Nor is the Federal budget excessive by recent historical standards. According to the CBO, Federal spending will hover right around 20 percent of GDP this year and for the rest of the decade. Federal spending during the 1980s averaged 22.2 percent of GDP and 20.7 percent in the 1990s. So additional funds could be devoted to national security if the tax revenue was available. But the tax cuts already enacted have ensured that tax revenue will not be available. Tax receipts will run at only 16.5 percent of GDP this year and 15.8 percent in 2005, the lowest level of taxation since 1950.
The Bush Administration initiated military campaigns in Afghanistan and Iraq with the same force levels it inherited from the Clinton Administration. The Army has been particularly hard pressed to meet the changed strategic circumstances. When Dick Cheney was Secretary of Defense at the end of the Cold War, he stated that 14 active Army divisions were the "irreducible minimum" needed to meet U.S. requirements. This number reflected a cut from the 18 divisions active during the Gulf War. President Bill Clinton downsized the Army to 10 divisions, its lowest strength since before the Korean War. Defense Secretary Donald Rumsfeld has opposed bipartisan calls for a rebuilding of the Army on cost grounds, preferring the expedient of calling up reservists and National Guard troops.
Secretary Rumsfeld's opposition to expanding the regulars is based on the belief that a larger Army will not be needed in the future. Testifying before the House Armed Services Committee last February, Rumsfeld argued, "The increased demand on the force we are experiencing today is likely a 'spike,' driven by the deployment of nearly 115,000 troops in Iraq. We hope and anticipate that spike will be temporary. We do not expect to have 115,000 troops permanently deployed in any one campaign." He then raised the specter of future troop cuts, saying, "Because we will be using emergency powers, we will have the flexibility to reduce the number of troops if the security situation permits - so the Army would not be faced with the substantial cost of supporting a larger force as the security situation and the efficiencies permit."
Rumsfeld's testimony conveys to both allies and adversaries alike that Washington is thinking more about withdrawing from the world than about confronting new threats, whether we realize it or not..
The Army is not the only service facing further cuts. Under the budget squeeze, the Navy's shipbuilding program for 2006 has been cut from six ships to four, and the construction of the next aircraft carrier may be delayed several years. This proposal would force American shipyards to lay off 5,000 skilled workers and endanger the viability of the entire naval industrial base. Navy commanders have argued that the fleet needs 350-375 ships (including 15 aircraft carriers) to meet current needs. The Navy currently has 291 warships (with only 12 carriers). Since a building program of at least 10 ships per year is necessary to maintain even this undersized fleet, the Navy will continue to decline under current programs.
Liberals were concerned that the Bush tax cuts would deny the Federal government the means to finance new social programs. Reality has played out in a much different, and ironic, manner. It is now the military which is being starved of the resources needed to reconstitute itself. Foreign adversaries, particularly Iran and North Korea, have undoubtedly taken note of both the political and financial strain the Iraq War has created. Their tone has become more uncompromising as they have realized that Bush has backed himself into a fiscal box and cannot sustain the global power projection capabilities needed to back his foreign policies
By keeping the same military force levels that were inherited from the Clinton administration, the Bush administration is signaling that in its second term, it expects a return to the "peaceful" world of the 1990s. It cannot afford for the world to be anything else. Unfortunately, America's adversaries see the world in a different way and will exploit any perceived weakness in the U.S. defense posture.
ping
1st of all the 236 billion dollar surplus of 2000 was a projection not an existing tangible pile of money, 2nd All I hear is numb nuts Kerry saying we shouldn't spent 200 billion on the war on terror instead we should have spent 200 billion on social initiatives in the US. How does that change the deficit? It is still 200 billion spent.
Kerry is an economic Girlie Man willing to put our lives at stake in favor of socialistic waste of money programs.
< SNIP >
This is far from the government-is-the-problem rhetoric that Republicans have touted for years. Great chunks of Mr Bush's economic vision sound more like Bill Clinton than Ronald Reagan. In his convention speech in 1992, Mr Clinton talked of a government that “expands opportunity, not bureaucracy”, a government that helps people succeed in a changing economy.
Mr Bush did more than steal the New Democrat rhetoric. He also copied Mr Clinton's strategy of using myriad small initiatives to show his desire to help Americans succeed. Mr Bush's speech (with accompanying details on his website) offered a slew of voter-friendly policies. There were plans to double the number of people in job training, increase money for community colleges, put a health centre in every poor county and begin a “Cover the Kids” campaign to extend health-care coverage to more poor children. Mr Bush pledged to increase Pell grants, which help the poor to pay for college. And he promised to make workplaces friendlier to families, by pushing for “comp time” and “flex time”.
But if half his vision was Clintonomic, the other half was more straightforwardly conservative. Tax cuts were still to the fore. “My plan will encourage investment...by restraining federal spending, reducing regulation, and making the tax relief permanent,” Mr Bush promised. Goals that many conservatives value even more highly—tax reform and pension privatisation—also got a mention. Mr Bush promised to lead a bipartisan commission to reform the tax code, to make the system simpler, fairer and more pro-growth. And he repeated his pledge from 2000 that younger workers should be allowed to divert some of their payroll taxes into individual retirement accounts (though there was no more detail on this than there was four years ago).
interesting article I also heard the reason the Guard and reserves are so heavily used is because they are cheaper. No need for family housing, etc. National security and our military is the one thing I don't mind the govt. spending money on, the one place I don't want it cutting corners.
To be fair, the policy in question is really the Clinton economic policy. Bush apparently has thought that he has very little lattitude to upset the apple cart, so to speak. Corporate interests are backstabbers, as evidenced by the amazing amounts they've contributed to the Left / Kerry so Bush fears that if he POs them, he'd lose what little support he's got. I can see why he's aged so quickly over the past 12 months. Until after the election, there's not a whole lot he can now do; not enough time to rebuild corporate support or make up for it if lost. The time for action would have been 2001, but as we know we had other problems.
Yeah, we are, but where-on-earth did you find ole-Joe, Tex?
Stay well, pal............FRegards
Perhaps the most significant part of the article is the second half, in which Rummy makes it clear that he thinks the world will "return to peace" in the near future.
I think Rummy's out on a limb there, to say the least. Even if we cut troop allocation in Iraq to 10K or so by next June and maintain that only as a 'forward presence,' replacing Saudi Arabia US bases, the possibility of deployment requiring more than 125K troops remains quite high.
What's up with THAT???
Somehow, I fail to see an endorsement of Kerry in the article.
Maybe you are a bit sensitive, eh?
The Republican nominee for US Senate in Wisconsin, Tim Michels, has made 'corporate malfeasance criminalization' a centerpiece of his campaign to date.
His victory in a 3 1/2 person primary last night was very interesting and may be a signal that Bush doesn't have to worry TOO much about the Fortune 100 treachery.
You sir are a total maroon.
Willie just vote for Kerry and get it over with.
Maybe it's time for a new set of binoculars, eh?
Kerry endorsement #1.
President George W. Bush’s call for additional tax cuts raises questions about whether the economy has really reached a point of self-sustaining recovery, or is simply lurching forward under the influence of stimulants. Taxes have been cut three times since 2001. According to the Congressional Budget Office, the estimated budget deficit will be $422 billion this year, $348 billion next year and then stabilize around $275-280 billion every year for the rest of the decade. This is a radical turnaround from the $236 billion surplus of 2000.
Kerry endorsement #2.
Indeed, administration spokesmen have taken to using the term “economy in transition,” which means that President Bush has no plan or intention of helping American manufacturing become more competitive or regain lost jobs.
Kerry endorsement #3.
President Bush is in trouble over Iraq because not enough planning and resources went into the conduct of the campaign that followed the initial successful invasion.
Kerry endorsement #4.
The Bush Administration initiated military campaigns in Afghanistan and Iraq with the same force levels it inherited from the Clinton Administration. The Army has been particularly hard pressed to meet the changed strategic circumstances.
Kerry endorsement #5.
Liberals were concerned that the Bush tax cuts would deny the Federal government the means to finance new social programs. Reality has played out in a much different, and ironic, manner. It is now the military which is being starved of the resources needed to reconstitute itself. Foreign adversaries, particularly Iran and North Korea, have undoubtedly taken note of both the political and financial strain the Iraq War has created. Their tone has become more uncompromising as they have realized that Bush has backed himself into a fiscal box and cannot sustain the global power projection capabilities needed to back his foreign policies.
Kerry endorsement #6.
By keeping the same military force levels that were inherited from the Clinton administration, the Bush administration is signaling that in its second term, it expects a return to the “peaceful” world of the 1990s. It cannot afford for the world to be anything else. Unfortunately, America's adversaries see the world in a different way and will exploit any perceived weakness in the U.S. defense posture.
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