You don't need an advanced degree from the John F. Kennedy School of Government at Harvard to understand that most Americans share a common goal: a stable, equitable, and democratic society that does not suffer from recession, unemployment, inflation, gross waste of natural resources, or the grinding misery of poverty. It stands to reason to conclude, then, that on the fundamental question of economic policy, the Bush administration has been a disastrous failure.
Since Bush took office, millions of Americans -- middle class, working class, professional and business executives -- have lost their jobs, their businesses, or their pension or retirement incomes. Millions more are only a layoff, an illness, a divorce, or an accident away from falling into poverty. For the past two years, our nation has experienced a nasty and lingering recession marked by sluggish growth, and the loss of two and a half million jobs in the private sector (the longest continuous stretch of job decline since 1944-46). The stock market has been in a tailspin, 401(k)'s are heading south, and confidence in corporate America has eroded badly due to the malfeasance and scandals associated with Enron, Global Crossing, Arthur Andersen, WorldCom, et al. All of these factors have contributed to significant increases in downsizing, unemployment, and homelessness. And now, after four consecutive years of federal surpluses under the Clinton administration, the Bush administration has managed to give us the largest federal budget deficits in our history. The prospects for the future do not look bright.
The Office of Management and Budget (OMB) is predicting that this year's federal budget deficit will reach a record-breaking $455 billion, $151 billion more than earlier predicted. Next year, OMB projects an even steeper budget gap, exceeding $475 billion, $168 billion more than anticipated. The five-year estimate is over $1.4 trillion. This is more red ink than the eye can see and does not include the Bush tax cuts or the sticker price for the Iraq war, occupation and reconstruction, which will cost anywhere from $75 to $125 billion.
The biggest culprit, of course, is the Bush policy of slashing taxes while at the same time cutting back on basic assistance to state and local governments. This could not happen at a worse time. The states are experiencing their biggest budget deficits since World War II. The sad truth is that what Washington giveth in tax cuts, the states taketh back in regressive tax increases and harmful service cuts -- with one critical difference: The federal tax cuts benefit mostly the wealthy, while state tax increases will primarily be shouldered by the middle class and the poor. The states' cuts in education, health care, nutrition aid, and job training will especially hurt the 35 million poor Americans and the 53 million who are living just above the poverty line. The local cuts in environmental protection, public safety, literacy and arts programs, and mass transit will hurt everyone.
These are not abstract statistics. The cuts will hurt millions of human beings living in real communities across the country. What's more, this is all happening at a time when over 41 million Americans have no health insurance, and one out of every five children are born into poverty. It's not a pretty picture, and the painful consequences will be felt long after this administration is gone. The futures of our children and grandchildren are being mortgaged without a serious national debate. Like snake oil, the Bush tax cuts may sell, but they don't cure.
How will Bush pay for his "shock and awe" tax package? The administration and Republican leadership in Congress are proposing steep cuts in Medicare, Medicaid, student loans, school lunches, child care, food stamps, homeland security, and just about every basic social and human service program. Republican leaders in Congress have taken the brutal irony to an even higher level by claiming "patriotism" as a rationale for reducing military veterans' benefits by $14 billion in order to fund additional tax breaks to the rich. These are the same veterans who fought in the Gulf and Iraq wars. There's an old saying in Las Vegas -- where, unlike Washington, they don't change the bottom line or hide behind patriotic slogans for political convenience or advantage. It goes, "Figures don't lie and liars figure."
The tax bill that the Republican-controlled Congress passed in June is a gimmicky package with sunset provisions that will ultimately cost more than Bush asked for. If the Bush tax cut plan is fully implemented, it would result in a record $980 billion increase in the national debt, with annual deficits of over $400 billion.
In the two years since Bush has been in office, we have shifted from being a nation with substantial federal surpluses to one with major deficits. The United States is now the world's biggest borrower; we export far less than we import; we produce far less than we consume; foreign investors own more of American assets that we own of foreign assets.
Until now, low inflation and low interest rates have kept our economy afloat by encouraging consumer spending. That could change rapidly as our debt mounts, driving up interest rates and inflation. According to Citizens for Tax Justice, the national debt will double in the next ten years as a result of Bush's tax policies. Who will benefit? It's estimated that someone earning $1 million or more will get a tax break of $92,000 each year, while an average American working family will receive $326. This is the height of fiscal folly.
The administration is pandering to, and exploiting, the most regressive and antisocial tendencies in our national character. It is undermining trust in the ability of the one force, government, that has the potential to balance, secure, and protect the freedoms and liberties of all our people, and to balance public and private interest. A vital and healthy government is indispensable to the well-being and sovereignty of a self-governing people. That is, after all, what democracy is all about.