Friday, September 16, 2005

Bush has just taken more Happy Rainbow Pills

Early this morning I read Daily Kos. Bonddad has posted a very though provoking and sensible piece on the economics of Bush's "recovery" plan.

Bush Proposed US' Fiscal Death Last Night
Fri Sep 16th, 2005 at 06:28:23 PDT

Bonddad posted numbers, the "metrics" Bush likes to use. Bush should read them:

Bush started his first term with a massive tax-curt for the rich, arguing that tax cuts in fact pay for themselves. While this didn't work when Reagan tried it in 1981, Bush gave it a second try. First, tax cuts don't increase receipts. In fact they decrease them. According to the Congressional Budget Office, in 2000 individual tax receipts (receipts from individual tax payers) totaled 1.004 trillion dollars. Many on the right will scream that I am using a boom year for comparison, so in 1997 and 1998 tax receipts were 737.5 billion and 828.6 billion respectively. For the years 2001-2004, individual receipts were 994 billion, 858 billion, 794 billion and 809 billion, respectively. When you cut taxes, revenues decrease, in this case by 18% from 2001 - 2004. Also note that Bush's tax receipts for 2004 were lower than Clinton's in 1998. As another comparison, individual income taxes as a percentage of GDP decreased over the same time from 9.9% to 7%.

At the same time, Bush decided to engage in a voluntary war. According to a report titled
The Iraq Quagmire, Congress has already authorized total spending of 249.7 billion. According to the Congressional Budget Office, prosecuting the war at current levels would double the federal budget deficit in 10 years. At a time when revenue was decreasing, Bush increased spending on something he didn't need to spend money on.

But the Iraq war was not the only item of spending on Bush's table. Again, according to the CBO, total outlays in 2001 were 1,863.0 trillion. This number increased to 2,292.2 in 2004. Over the same period, total revenues decreased from 1,991.2 in 2001 to 1,880.1 in 2004. In other words, spending increased and revenue decreased. If we take the Iraq figures from above out of the total increases, we still get a net increase of 179.5 billion dollars.

He's right and we are fast heading to a situation we were in during Vietnam. A man born with a sliver spoon in his mouth, who never has known what it's like be poor or middle class, to worry about ones financial future, or where the next mortgage/rent payment is coming from. He is borrowing from our children's future and bankrupting it.

Congress already had a shopping list of programs it wanted to cut the funding to, student loans among them. It's ironic that not only does the "education president" fail to fund his "no-child left behind" program, leading at least 45 states in open revolt this year, but now the key to a better live is being taken out of the hands of those who jumped through all the hoops of his plan.

The Daily Aztec of SDSU put it this way:

(Page 1)
Senate aides are looking to cut funding from federal student loan programs, including the Perkins Loan Program, which could result in a loss of $7 billion in financial aid. Although the House Education Committee voted to preserve the Perkins Loan Program this July, Congress is working on legislation that would decrease aid offered to students in higher education.

With college prices on a continuing upward slope, organizations such as the Coalition of Higher Education Assistance Organization have lobbied to Congress on the importance of keeping loans available to students.

"Students have to somehow come up with money for the rising costs of college, and Perkins loans are a low-interest way of doing that," Harrison Wadsworth, the executive director of COHEAO, said. "Students need these funds to finance their education. Nearly 70 percent of financial-aid money comes from the federal government, most of this being in the form of loans, according to

(page 2)
Qualifications for each loan depend on a student's expected family income, which is determined by filling out a Free Application for Federal Student Aid, Collins said.

Loans are granted from a revolving fund in which the university matches the federal portion given. In recent years, however, there have been no additional federal capital contributions, and Congress now wants to pull back the federal portion of funds to relieve the U.S. deficit, Collins said.

"With the help of students and people staffed in higher education," Wadsworth said, "(we) need to let Congress know of the importance of (loans).

"Students need the program."

Our global competitiveness depends on higher education for the masses. Especially since we are moving from an industrial to a tech/communication/service economy. There simply will be fewer and fewer production jobs that provide a living wage, for an under educated public. Further some of our biggest global competitors provide some from of subsidy for higher education. It doesn't seem all that much to make sure loans to students who want to go to higher education be available. (IMO the problem has been enforcing penalties for defaults, if there hasn't been a justifiable waiver. Twenty years ago, I worked with plenty of doctors who defaulted on their student loans. )

But here again governmental myopia dooms us to loose competitiveness in the global arena. Since 9-11 we've made it tougher for many foreign students to get here. Since state universities/colleges charge an arm and a leg for out of state students, a large portion of their revenue dropped. Even in private universities revenue was down due to lack of students. Unable to cover the tab, they did what other businesses do, they past the cost on to the buyer, in this case, the student.

Will the lack of loans to pay cause more students to stay "home?" Will the loss of students cause faculty and staff to be cut? will the gap between the wealthy and the poor grow wider?

Now when we are faced with rebuilding the gulf cost, when many would gladly give back their little over a $1.00 a day tax rebate (and please tell me, what kind of "conservative " spends/refunds the rainy day fund? Couldn't all that money have helped here? What kind of "conservative" doesn't save for the future in case something dire happens? That includes a "conservative" government. Did they just think they were going to roll lucky 7s all the time? Sorry Grandma and Grandpa but your conservatism is gone.), people saying that they understand that a tax hike may be necessary because oh, they've balanced a freaking check book before, what does our presnut say? Bush Rules Out Tax Hike to Fund Recovery

So where, almighty Kreskin, is this money going to come from? Cutting spending for domestic programs most probably, while leaving his unnecessary war in Iraq alone. I'm reminded of the ad during the Vietnam war that had several people sitting around a table waiting to get a piece of pie. Children, the disabled, the poor, etc. all got the tiniest sliver of pie, then what was left, a huge piece of pie, was given to the guy at the head of the table who was wearing a military uniform.

We need to find and bring back that add.

But then there is this little jewel in the AP article:
Bush said he was confident the United States could pay for reconstruction "and our other priorities."

"I means we're going to have to make sure we cut unnecessary spending. It's going to mean that we maintain economic growth and we should not raise taxes," he said.

Hey, your little war in Iraq was never one of my priorities. This nation is one of my priorities, so maybe was an cut some unnecessary spending by ending our occupation and the trillions of dollars that go with it. I know it's hard but it's been done before, Great Britain had to do it after WWII.

It's either that of coming to the check book realization that Bush has got to raise taxes. If not I really fear for my country and the economic suicide Bush will place us on. The one bright spot is that we may be able to finally find the drug he's on that removes the reality means and makes him believe he's super man and can do it all. I'd like to have those happy rainbow bright, the world is fine, and the ship's not sinking pills when the economy tanks due to the course Bush seems intent to put us on.

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