Red George: Meet America's most profligate president since the Vietnam war

The Economist ^ | July 3, 2003

[sarcasm]

Red George

Jul 3rd 2003
From The Economist print edition

Meet America's most profligate president since the Vietnam war

MOST people only have to see the word Medicare and they turn the page. Please resist, just this once. There are few better ways of understanding America's emerging Republican establishment than studying the two Medicare bills that are currently working their way through Congress.

These bills point to two conclusions that are worth pondering by people who don't give a fig about co-payments. The first is that the Republicans are mighty shrewd when it comes to short-term political manoeuvring. The second is that they are almost completely indifferent to the basic principles of sound finance.

Start with the politics. Ever since Lyndon Johnson introduced Medicare in 1965 as one of the edifices of his “Great Society”, Democrats have been taunting the Republicans as hard-hearted bastards who don't give a damn about the elderly. What better way to shut the Democrats up than a new $400 billion drugs benefit? Congress still has to reconcile the Senate and the House versions of the bills, a procedure that could take until the autumn. But few people doubt that the law will eventually pass—and that Mr Bush will enthusiastically sign it. This will also reinforce the Republicans' claim that they are better at getting things done than Democrats (who, in Republican lore, ran Congress for decades without doing anything about drug prices).

Nice Bill Frist, the do-gooding doctor who replaced Trent Lott as Senate majority leader, will be able to boast that he has passed a major Medicare reform within a year of taking up the job. Mr Bush will be able to go into the next election armed with yet more proof that he is both a “compassionate conservative” and a “reformer with results”—a man who has not only toppled the Taliban and Saddam Hussein but also reformed education and Medicare. Republicans are already bragging that Mr Bush's embrace of Medicare reform is the same as Bill Clinton's embrace of welfare reform back in 1996—a manoeuvre that magically transforms a liability into a strength.

There is, however, one tiny difference. Welfare reform was an admirable policy that led to a sharp reduction in welfare rolls. Medicare reform is lousy policy. The Republicans have given up any pretence of using the new drug benefit as a catalyst for structural reform. They are doing nothing to control costs or to target government spending on people who really need it. They are merely creating a vast new entitlement programme—a programme that will put further strain on the federal budget at just the moment when the baby boomers start to retire.

This might be tolerable if the Medicare boondoggle were an isolated incident. But it is par for the course for this profligate president. Every year Mr Bush has either produced or endorsed some vast new government scheme: first education reform, then the farm bill, now the prescription-drug benefit. And every year he has missed his chance to cut federal pork or veto bloated bills.

As Veronique de Rugy of the Cato Institute points out, federal spending has increased at a hellish 13.5% in the first three years of the Bush administration (“he is governing like a Frenchman”). Federal spending has risen from 18.4% of national income in 2000 to 19.9% today. Combine this profligacy with huge tax cuts, and you have a recipe for deficits as far ahead as the eye can see.

Why has the self-proclaimed party of small government turned itself into the party of unlimited spending? Republicans invariably bring up two excuses—the war on terrorism and the need to prime the pump during a recession; and then they talk vaguely about Ronald Reagan (who sacrificed budget discipline in order to build up America's defences).

None of this makes much sense. The war on terrorism accounts for only around half the increase in spending. The prescription-drug entitlement will continue to drain the budget long after the current recession has faded. As for Mr Reagan, closer inspection only makes the comparison less favourable for Mr Bush. The Gipper cut non-defence spending sharply in his first two years in office, and he vetoed 22 spending bills in his first three years in office. Mr Bush has yet to veto one.

Ronald Reagan wouldn't

The real reasons for the profligacy are more depressing. Mr Bush seems to have no real problem with big government; it is just big Democratic government he can't take. One-party rule, which was supposed to make structural reform easier, also looks ever less savoury. Without a Congress that will check their excesses, the Republicans, even under the saintly Dr Frist, have reverted to type: rewarding their business clients, doling out tax cuts and ignoring the fiscal consequences.

This opportunism may win Mr Bush re-election next year, but sooner or later it will catch up with his party at the polls. The Republicans are in danger of destroying their reputation for managing the economy—something that matters enormously to the “Daddy Party” (which sells itself as being strong on defence and money matters). The Democrats can point out that Bill Clinton was not only better at balancing the budget than Mr Bush. He was better at keeping spending under control, increasing total government spending by a mere 3.5 % in his first three years in office and reducing discretionary spending by 8.8%.

The Republican Party's conservative wing stands to lose the most from this. Some conservatives credit Mr Bush with an ingenious plan to starve the government beast: the huge tax cuts will eventually force huge spending cuts. But this is rather like praising an alcoholic for his ingenious scheme to quit the bottle by drinking himself into bankruptcy. There is no better way to stymie the right's long-term agenda than building up the bureaucracy (government being a knife that only cuts leftwards). And there is no better way to discredit tax cuts than to associate them with ballooning deficits. For the moment Mr Bush is still the conservatives' darling. Will they still love him a decade from now?

[yooper]

On whose shoulders did Hitler place the blame for the burning of the Reichstag?

Look, I realize that there were a few (not "scores") of leftists who allied with Hitler for one purpose or another, but the fact remains that Bolshevism was anethema to Hitler....

[gcruse]

Do you honestly believe that they WOULD let us in on the real plans?

We are supposed to turn a blind eye to whatever government does
with the exception of election day?  That's a new way of thinking, alright.

[Torie]

No, that is real money. Is that the number, 237 billion? Over how many years was that? Just for the record, I oppose all farm subsidies, and most especially the ethanol one. The whole thing is ludicrous, particularly these days when we don't have a geographically and culturally isolated agrarian population, that without the government tiet, will be totally adrift and wander into the cities as paupers to fill up shanty towns, and end up with lives brutish and short. I wonder if my mother is still getting subsidies from the farm she and my aunt own, that my great grandparents once farmed. I should inquire of my aunt on that, since she controls the money on that one.

[GaConfed]

you and the rest of the David Duke crowd

Man, I must be some kind of formidable foe, in your eyes, to your One World NWO dreams. You throw up a straw man (David Duke) in front of me to front another straw man (the race card). But that's typical for all you liberals in compassionate conservative drag.

Just a little message for you and all the other Economic Men out there: Constantly focusing on the material and what satisfies the various vulgar appitites sure does narrow your perspective on life. It makes Texas Dawg a rather dull boy.

[Texas_Dawg]

But you see, we no longer have that faith.

Oh, really?? No I don't see, and I don't think the millions of people owning U.S. treasury notes, bills, and bonds in their 401k's or other investment accounts have lost faith in it either (thus the reason they keep purchasing them).

And if you were really worried about declining foreign investment in the U.S., you'd support lowering tariffs and other barriers to free trade, but I'd be pretty willing to bet you are opposed to that as well.

[yooper]

One worse thing than dieing is dieing knowing a certain prescription will save you and you can't afford it.

I don't support the prescription plan, but I do recognize that a civilized society has an obligation to to a small minority of it's citizens who can't fend for themselves, in one way or another.

Defining that minority is the problem here, and the president's plan defines that minority too greatly. That said, and I reiterate, there are those individuals at the bottom of the minority who need help.

[Texas_Dawg]

You throw up a straw man (David Duke) in front of me

Ummm... you just said earlier in the post that you would vote for him if he ran against Bush.

One World NWO dreams

Have you been watchin' that wrasslin' again, Cooter? Don't you have some black helicopters to be chasin' or a militia meeting to attend or something?

[yooper]

We shouldn't be legally required, we should recognize that we're morally required to help those in legitimate need.

[Texas_Dawg]

Nice. No disagreement here then. (I don't want to "protect" a thing. Even the distortion of the word in an economic context makes me ill. Trade protection is just socialism by a different name.)

[Texas_Dawg]

We shouldn't be legally required, we should recognize that we're morally required to help those in legitimate need.

That's fine, and I agree with the latter half of that, but if you truly believe the first half, then you'd support the removal of price controls and Medicare subsidies (which are just a nice name for legally being required to pay for people's drugs).

[GaConfed]

Ummm... you just said earlier in the post that you would vote for him if he ran against Bush

Link please. Fact is, that is either a bald face lie, or you haven't been paying attention.

I don't need to chase anything. All I have to do is open my eyes and ears. As for Rasslin', I equate it to Clinton. It's transparent enough for someone with an IQ over about 110 to discern what it's all about. As for the rest, hell, let'em go on with their delusions. Keeps 'em out of trouble.

BTW, GWB is a right smart fella. Lot's smarter than Slick because the demographic he has fooled is a lot smarter and a lot bigger than Slick's. He's a heep more dangerous also.

[gcruse]

You know that $237 billion number is suprisingly common.
Way too common considering the 236 other possiblities.
Must be one of those magic numbers.
Couldn't find the ag number/
_________
The Economic Strategy Institute, the Washington, D.C.-based
 think tank, estimates href="http://www.e-insite.net/eb-mag/index.asp?layout=article&articleid=CA67174">U.S. technology industry could lose
 as much as $237 billion over the next five years.
____________
The Administration also announced that we are projected to pay down $237 billion in debt in 2001.
___________

New estimates from the Joint Committee on Taxation show the reduction in the 39.6

percent marginal tax rate contained in H.R. 3 and the President's plan would cost $237 billion

over ten years, even though fewer than one percent of all tax filers are in this tax bracket. The

[GaConfed]

you'd support the removal of price controls and Medicare subsidies (which are just a nice name for legally being required to pay for people's drugs).

So you do disagree with the administration on this I see. Maybe you aren't a Bushbot after all Texas Dawg.

(BTW, you do know that my beloved Georgia Bulldawgs have copyrights to that southernization, "dawg", for the proper English word, "dog," don't you?? Might have to go see a couple of promeinent UGA law Dawgs about you. :0)

[ForOurFuture]

The following Republican Representatives voted against the socialist expansion of government that is the recently passed Medicare Prescription Drug bill :

Burr
Burton (IN)
Buyer
DeMint
Flake
Gutknecht
Hostettler
Jones (NC)
Miller (FL)
Moran (KS)
Musgrave
Norwood
Paul
Pence
Ryun
Sensenbrenner
Shadegg
Smith (MI)
Tancredo

They should be congratulated for their stands. If one represents you, send them a letter.

[Puddleglum]

Many times there are much cheaper alternatives to the drugs you are wanting to put price controls on

You know, just as an aside, I wonder if the demand for prescription drugs hasn't gone through the roof and dragged government and private insurance costs up with it? I remember when prescription drugs weren't advertised on TV in the same way over-the-counter cold cures are. I wonder if insurance, including Medicare, isn't subsidizing the pharmecutical companies massive marketing push of what I'd call non-critical or "convenience" prescriptions (allergy relief, mild mood stabilizers, etc)?

And yes, Bush does need to veto a few pork-laced budgets no matter which party loads them up. I'll be more confident in the argument he'll do this in his second term if he does at least a little of it in his first.

[Texas_Dawg]

Well then, you might want to tell 'em I'm Texas_Dawg on the DawgVent (UGASports.com) as well while you're at it. ;-)

[John H K]

The whole issue of the precise ideology of the Nazis and Hitler in Germany is pretty complex and one that often gets greatly oversimplified; one belief that I've seen often on FR recently (not that you've presented it, but I've seen it elsewhere on this and other threads) is an over-focus on National SOCIALISM (from a modern, English-language concept of the word Socialism) and people claiming that therefore Communism and Nazism were effectively identical (the fact that the Nazi party began as the German Worker's Party also tends to foster this view.)

The DE FACTO reality is that in practice, Communism and Nazism/Fascism end up looking a lot alike, but the reality is that they are still in many ways opposing ideologies.

And they certainly were in Germany in the 30s and 40s. There was a wing of the Nazi Party, and one Nazi-affiliated newspaper, that really sounded pretty Communist in their outlook on labor issues; Hitler eventually purged them.

During the critical period of Hitler's rise to power he actually toned down his anti-Jewish rhetoric and focused the most on anti-Bolshevik and anti-Communist rhetoric. He thereby gained the support of the German middle class and the German industrialists. The anti-Jewish rhetoric earlier helped garner lower-class and peasant support for Hitler and distracted them from falling under the typical Communist rhetoric aimed at them.

At no time was Germany under Hitler a state that could properly be described as Communist.

[Jesse]

"The second is that they are almost completely indifferent to the basic principles of sound finance. ...Bill Frist, the no-gooding doctor who replaced Trent Lott as Senate majority leader."


The GOP is worthless.