7-18-05, 8:39am

As some conservative estimates show that Bush’s war on Iraq and the invasion of Afghanistan will cost close to one-half trillion dollars by 2011, it is worth a reminder just how large a financial collapse Bush administration and Republican Party policies have provoked.

Upon assuming office, Bush inherited a projected 10-year budget surplus of $5.6 trillion, according to the bi-partisan Congressional Budget Office. The most recent estimate for 2005 is that the deficit will soar to a record $333 billion, according to the White House’s own projections.

While Bush tries to blame the growing deficit on added unnecessary spending inserted by Congress, the main cause has been massive tax cuts aimed largely at the highest income earners. According to the calculations of the Center on Budget and Policy Priorities, Bush’s tax cuts caused 60 percent of the 2005 budget deficit, or $247 billion. Over the course of the tax cuts (2003 to present), hundreds of billions more have been added to the growing national debt. Further, Bush’s claim that Congress is responsible for spending growth is countered by his own allies at the extreme right-wing “think”-tank Heritage Foundation. The wing-nuts at Heritage favor excessive and irresponsible tax cuts, especially for the high income sections of the population that write fat checks to fund their foundation. They also oppose government spending, with the exception of the spending that pays for lots of new cruise missiles, prisons, and corporate subsidies.

Even Bush’s allies have criticized him and the Republicans in Congress for allowing spending to grow even faster than Clinton, increasing non-defense spending by 36 percent in Bush’s first term and refusing to veto any of those spending bills he claims to have disliked. Defense spending has grown at an even more irresponsible rate, mainly to fund a war that he lied to get us into and buy more world-threatening weapons out of proportion to the needs of defense.

Bush’s proposed budget for 2006 adds another $60 billion or so to the annual deficit (on paper) even as it doesn’t project the estimated cost for occupying Iraq and Afghanistan.

With Bush’s help, a once shrinking national debt now stands at $7.84 trillion. The Gross Domestic Product (GDP) is estimated to be $34,000 per person. The Treasury Department estimates the national debt at $26,437 per person. If you are wondering why the economy is growing at a crawl, why wages are stagnant, why new jobs seem to pay less than the old jobs, or why productive sections of the economy are shutting down, this mounting debt and the fact that 77% of everything we produce is owed may be one major cause.

In fact, despite what was touted as positive jobs report last week, 24,000 manufacturing jobs were lost in June and the retail sector added only 2,000 jobs. Other signs indicate a return to week consumer demand and spending. Overall, the 146,000 jobs that were added did not even keep pace with population growth, as, according to the Bureau of Labor Statistics, about 150,000 jobs are needed each month to place new workers entering the economy for the first time.

And if the difficulty of finding work isn’t tough enough, it was made even tougher by the fact that 306,000 people in the past 12 months took a second job to cover falling wages or cut backs in hours. About 5.4 percent of all working Americans hold multiple jobs.

Of the total new jobs that have been created in the 24 months, 3.1 million are service sector jobs that pay less than the national average. Over 300,000 new jobs have been temp jobs, and 900,000 have been in low-wage retail, restaurant, or hotel jobs.

It should be clear once and for all that trickle down economics and tax cuts for the rich just don’t make sense as sound economic policy. In Bush’s view, economic stimulus meant handing hundreds of billions of dollars to the very wealthiest minority of Americans, while cutting back, privatizing, or eliminating public services that aid the vast majority.

What does it show us? That a relatively tiny minority that benefits from these policies unfortunately continues to hold disproportionate power in our democracy. Unfortunately this has become a way of life in the past 25 years.

What is the result? Massive debt, a fundamentally weak economy, and dire straits for most working people. We should reject the right wing’s bankrupt trickle down economics.

A reasonable budget policy would: repeal tax cuts for the rich and wasteful corporate subsidies, create a tax cut for working families, boost spending on safety net services (real economic stimulus), such as: anti-poverty programs, Social Security benefits, unemployment benefits, worker training programs, public education, health care, targeted infrastructure development, and the like make responsible cuts in military spending, such as: eliminate excessive waste, end the occupation of Iraq and Afghanistan, rebuild responsible collective security partnerships with the international community, stop nuclear weapons and other WMD programs, end military-related aid to repressive governments, end the occupations of Colombia, Cuba, South Korea, Japan, South and Central Asia, and other places where US military bases are located not for defense but for imposing US foreign policy.



--Reach Joel Wendland at jwendland@politicalaffairs.net.