Dude, where's my surplus?

ANN ARBOR, Mich. -- At the end of a voyage of purse-popping prosperity, the United States finds itself sailing under the stormy clouds of a recession. The gloomy atmosphere of economic decline has only been worsened by several recent reports from economic analysts, most notably the Congressional Budget Office, that the Bush administration will very likely have to use surplus Social Security funds to fund federal programs. Even the Bush administration has tempered its language on the subject, taking a care to caution its previous pledge to protect Social Security surpluses with new exemptions in the case of war or recession.

This turn of events is important for many reasons. First, it shows the clear folly of the Bush administration's tax cut. This measure, undertaken in the wake of an impending recession, has effectively halted Congressional ability to increase federal spending - the classic Keynesian economic cure for economic downturn.

Bush has defended his tax cut saying that it will boost individual consumption and thereby provide the fiscal stimulus to counteract the slowing economy. This claim is unsound at best. While it is true that tax cuts help combat recession, they are less economically effective than increased federal spending. Couple this with the dire need for higher educational spending - a key point in Bush's campaign - and the impropriety of Bush's unnecessary and uncalled for tax cut is obvious.

Secondly, Bush is caught between a rock and a political hard place. If he does use Social Security surpluses to finance his budget programs, he will be reneging on a key campaign promise that both he and congressional Republicans made to their constituents. This could cause a rift both within his party and across party lines - hardly a helpful possibility for a government faced with potential economic crisis. Moreover, the American public has been told by politicians that dipping into Social Security will jeopardize their retirement benefits. If the federal government breaks its financial promise to the American people to protect Social Security now, it undermines domestic and international confidence in other U.S. stock and bond markets, doing so would undermine the public's confidence in investing.

Yet, through this storm of controversy Bush has maintained his call for increased national defense spending, at a time when his tax cut has all but eliminated excess funds for federal spending. Meanwhile, he has simultaneously marginalized the importance of education, health care and other important programs by asking that defense spending be prioritized during congressional appropriations debates.

While it is true that tax cuts help combat recession, they are less economically effective than increased federal spending.

What classic Liberal garbage...give your money to the government...they know what's best.

ATTENTION MICHIGAN DAILY EDITORIAL STAFF: If you are so against the tax cut, please feel free to forward your tax rebate checks to me. In a way, think of me as the federal government - I'll know better what to do with your own hard earned money than you will.

The Trust Fund is a hoax. Social Security is a Ponzi Scheme. Dem-commie-libs spent all excess S.S. money on general expenses during their forty year control of Congress (1955-1994).

Why does increased federal spending benefit the economy better than tax rebates? The article doesn't even attempt to prove this statement.

How would the Dems distribute increased spending, anyway? Target it to the poor so they can buy extra lotto tickets? Build more hiways to nowhere?

It's common knowledge that nearly half of the money that goes to D.C. simply disappears, through waste, graft, mismanagement or is simply "lost". How is this more efficient?

Bush is doing what's politically possible to avert recession, but it's been coming for over a year and everyone knew it (including the Democrats who want to blame him for it).

Either way, there is no point in having a budget surplus.So an immediate full tax rebate of $150 bil or the creation of private SS accounts funded initially by this amount would solve the worries of all the green eyeshaders.

First, it shows the clear folly of the Bush administration's tax cut. This measure, undertaken in the wake of an impending recession, has effectively halted Congressional ability to increase federal spending - the classic Keynesian economic cure for economic downturn.

Wow...I can't even come up with a response to this.

Keyens is dead. What about Keynes saying that as unemployment went up inflation would come down, and vis versa? If that is the case, could he please explation the stagflation of the late 70's and the development of the "Misery Index?"

Here's a response that works:

Keynesian economics advocates TWO things to stimulate the economy - the first is to increase spending by consumers. The government can do that by instituting a TAX CUT. Yes, tax cuts are in there...

The second thing that Keynesian economics advocates is increased government spending - BUT SPECIFICALLY, DEFICIT spending. That's right folks, Keynes specifically says that the increased government spending cannot come through tax revenues because that inhibits consumer spending.

The author of this article does NOT know their economics.

Another publik skool grad, no doubt.
I graduated from public school and continue to be offended by the assumption of many on this forum that we are all dolts.
Anyhow, with my public education I read the first three words into the post and knew this would be typical liberal tripe.
The words: Ann Arbor, MICH.

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