How Bush brought America to the brink of economic ruin!

How Bush brought America to the brink of economic ruin!
Len Hart
The Existentialist Cowboy


Just a year ago Bush played guitar while New Orleans drowned. Nothing has
been learned. Nothing has changed. New Orleans is morbidly fascinating
because Americans, intuitively, have seen in that disaster our nation's
future. But Bush, like a fiddling Nero, stays a failed course amid warnings
that our nation is falling apart at the seams heading for third world status
and catastrophe.

The warnings come amid the valid assessment that Bush's tax cut for the rich
failed to make good on two empty promises: it did not trickle down or prime
the economic pump and it did not pay for itself as Bush himself had promised
it would. In fact, the poor have gotten poorer, the rich exceedingly rich.
The nation is bankrupt to boot. The dollar is allowed to slide and we are
dependent upon China, Japan, and the EU to keep the anemic dollar propped
up. Were it not for that we would have no purchasing power at all.

Ronald Reagan made the same promises in 1982 -but, according to the US
Census Bureau, only the upper quintile prospered. Every other income group
lost ground even as Reagan's deficit grew exponentially. Unfortunately, Bush
is still being assessed. But just one year after Congress bowed to Bush and
passed the tax cut of 2001, the Brookings Institution would write:

The official federal budget outlook has deteriorated dramatically since
early 2001, due to last year's tax cut, the economic slowdown, and the
terrorist attacks on September 11, 2001. In addition to the pressures from
the long-anticipated increase in entitlement spending as the nation ages,
the government now also faces growing spending needs for defense and
homeland security. These trends imply that future taxes must rise, future
spending outside of defense and the elderly must decline, or obligations to
the elderly and to defense be reduced.

-Alan Auerbach, William G. Gale, and Peter R. Orszag
June 2002, The Budget Outlook: Options for Restoring Fiscal Discipline,
Brooking Institution



But GOP supply side, trickle down economics also promises more opportunity,
a growing economy, more jobs.

Some in Washington say we had to choose between cutting taxes and cutting
the deficit..Today's numbers show it to be a false choice. The economic
growth fueled by tax relief has helped send our tax revenues soaring. That's
what has happened.

-George W. Bush

But that's not what happened. Wealth has never trickled down and there is no
"higher pie". A Treasury Department analysis refuted Bush directly,
confirming in its analysis what many experts and Bush critics had been
saying all along: tax cuts do not come remotely close to paying for
themselves. [PDF] . In other words, the two promises of "trickle down"
theory are dead wrong: wealth does not trickle down and tax revenues do not
increase to make up the short fall.

As Dizzy Dean said: it's deja vu all over again! Why does the GOP insist
upon repeating failed strategies. Reaganites promised that the stimulated
economy would outgrow the deficit and the budget would be balanced
"...within three years, maybe even two." It didn't! Reagan tripled the
deficit and, on the way, he doubled the size of the federal bureaucracy.
Reagan's tax cuts were followed promptly by the longest and worst recession
since Herbert Hoover's Great Depression. As Robert Freeman correctly points
out: "...Jimmy Carter's last budget deficit was $77 billion. Reagan's first
deficit was $128 billion. His second deficit exploded to $208 billion. By
the time the "Reagan Revolution" was over, George H.W. Bush was running an
annual deficit of $290 billion per year."

How will Bush compare to Reagan? By the year 2002, Citizens for Tax Justice
were already writing:

Over the ten-year period, the richest Americans-the best-off one percent-are
slated togwb0602a.gif - 10559 Bytes receive tax cuts totaling almost half a
trillion dollars. The $477 billion in tax breaks the Bush administration has
targeted to this elite group will average $342,000 each over the decade.

By 2010, when (and if) the Bush tax reductions are fully in place, an
astonishing 52 percent of the total tax cuts will go to the richest one
percent-whose average 2010 income will be $1.5 million. Their tax-cut
windfall in that year alone will average $85,000 each. Put another way, of
the estimated $234 billion in tax cuts scheduled for the year 2010, $121
billion will go just 1.4 million taxpayers.

Although the rich have already received a hefty down payment on their Bush
tax cuts-averaging just under $12,000 each this year-80 percent of their
windfall is scheduled to come from tax changes that won't take effect until
after this year, mostly from items that phase in after 2005.

1968 was the year in which measured postwar income was at its most equal for
families. The Gini index for households indicates that there has been
growing income inequality over the past quarter-century. Inequality grew
slowly in the 1970's and rapidly during the early 1980's. ...

Generally, the long-term trend has been toward increasing income inequality.
Since 1969, the share of aggregate household income controlled by the lowest
income quintile has decreased from 4.1 percent to 3.6 percent in 1997, while
the share to the highest quintile increased from 43.0 percent to 49.4
percent. Most noticeably, the share of income controlled by the top 5
percent of households has increased from 16.6 percent to 21.7 percent. Over
the same time period, the Gini index rose 17.4 percent to its 1997 level of
.459.

-Income Inequality, Census Bureau

The trend began then has continued: October 2003 figures from the U.S.
Census Bureau make stark reading:

Median household incomes are falling The number of Americans without health
insurance rose by 5.7 percent to 43.6 million individuals.

The number of people living below the poverty line ($18,392 for a family of
four) climbed to 12.1 percent - 34.6 million people.

Wages make up the majority of income for most American families. As
"Downward Mobility," NOW's report on workers and wages illustrates, many
American workers are facing corporate efforts to cut pay and benefits, which
could lead to more American families struggling to stay out of poverty.

The results in black and white:

* Twenty percent of the population owns 84% of our private assets, leaving
the other 80 percent of the population with 15.6 percent of the assets.
* In 1960, the wealth gap between the top 20 percent and the bottom 20
percent of Americans was thirty fold. Four decades later it's more than
seventy-five-fold.
* Either way -- wealth or income - America is more unequal, economists
generally agree, than at any time since the start of the Great Depression.
* And more unequal than any other developed nation today.

-Inequality.org

Why are failed strategies repeated? The GOP prescription seems to be: just
take another dose of whatever it is that's making you sick.

Unfortunately, there is an entire caste of people who leech off the labors
of others. They dare to call it "free enterprise". GOP policies have built
our economy around our chief export: death and destruction. It is served up
by our biggest industry, the biggest single slice in our budget pie
chart -the military! Tax cuts, meanwhile, favored a tiny elite even as
purchasing power of the ever poorer American working class depends upon the
good graces of China. One is tempted to believe that what normal people
perceive as Bush incompetence is, in fact, a deliberate and cynical GOP
policy. Bush may have given the game away when he addressed a meeting of the
"upper one percent" of the population -the primary beneficiaries of his tax
cut. Predictably, he smirked and called them his "base".

Here's an update with the very latest Census Bureau info:

The Bush Record: More Poverty, More Uninsured
<http://thinkprogress.org/2006/08/29/bush-record/>
Bush says "the foundation of our economy is solid, and it's strong." That's
true, for some: corporate profits have now climbed to their highest share of
GDP since the 1960's.

But new Census Bureau data
<http://www.census.gov/Press-Release/www/releases/archives/news_conferences/007338.html>
show the real state of the current economy. The Bush record on combating
poverty and insuring more Americans is an undisputed failure.

More on the new census data HERE.
<http://thinkprogress.org/2006/08/29/new-census-numbers/>


Source:
http://existentialistcowboy.blogspot.com/2006/08/catastrophic-and-reckless-how-bush.html

How Bush brought America to the brink of economic ruin!
Len Hart
The Existentialist Cowboy