The View from the Meadow

Observations of the Passing Scene

Political and Social Commentary by Dave Satre

Bush Budgets America
While Squandering Another $87 Billion in Iraq

Among the most interesting aspects of the current discussion over reducing the country’s budget is the fact that domestic discretionary spending amounts to less than 18 percent of the total budget. This includes everything outside of defense and Homeland Security spending. It would seem obvious that the best place to start cutting back would be in the "defense" (read War) and homeland security budgets.

Instead, the Republican administration is pushing to cut the national budget by reducing everything else, especially the programs that benefit the people the most, including Social Security and healthcare programs, while squandering billions of dollars in Iraq. It should be pointed out that Republicans are historically opposed to the so-called “entitlements”, which benefit the people, while they also strongly support the reduction of taxes for the rich. This is, obviously, because the Republican party has historically supported big business.

I heard someone discussing the Social Security issue (More Info) on NPR the other day. He pointed out that the Baby Boomers are the largest tax-paying group in this country’s history and the taxes paid by this group have resulted in a huge surplus, which very few people are discussing. He likened the situation to a pig passing through a python -- a huge lump of excess income that is much more than what is required to pay today's retirees.

The real problem is that the government has absconded with these funds. To solve the situation it would merely require the government to pay back the money. And there is no immediate threat of bankruptcy. I’ve heard various estimates, but apparently the current system will survive another 40 years or so before going broke.

The SS plan needs fixing in the long term, but this shouldn't be rushed into. Bush's attitude strikes me as all too similar to his rush to war in Iraq. He’s trying to force us into privatizing Social Security. Why? What are his motives? Who would really benefit from this plan?

Hmmmmmmm. History tells us it won’t be the country’s retirees. The money managers? Wall Street and the financial investment community? Is this just more cronyism on the part of The Regime? It certainly will not benefit the people.

The plan to privatize part of the social security funds has been tried many times before in various countries and has never worked. Particularly in Britain, 25 years ago under Hatcher, and in Sweden. (More Info)

Privatization is not the solution. It is just an excuse to open up another government trough for the investment industry. What will probably happen is the development of a bunch of government-authorized funds, handled by the investment community. It will cost trillions of dollars --- at least $2 trillion over 10 years --- just to switch to the new system. After that, the fees charged by the fund managers will eat up the profits. Throw in a market collapse or two in a working lifetime and there is no profit left to retire on.

Another Bush proposal, basing the SS payments on current prices instead of wages, would result in a 50 percent reduction in the size of payments in 30 to 40 years, not increase them. (More Info)

The Republican penchant for "supply-side economics" (dipping into the till) is the biggest problem with the economy. The current deficit didn't just happen. The same thing happened under Reagan, who entered office as the head of the world's richest country and left behind the world's largest debtor nation. They call it the Tickle Down Theory, which is just an excuse to make the rich richer and the poor poorer. I call it the Piddle on the Peons Theory.

Clinton inherited a $292 billion deficit from Bush the Elder --- the largest in history. He handed GW a $236 billion surplus, the largest in history, when he left office. This shows that fiscal management is possible --- just not under a Republican administration. They believe in putting the country in debt. (More Info) Bush went through that surplus like a kid in a candy store and turned it into a $422 billion deficit within his first four years.

Clinton also embarked on a plan to eliminate the national debt and lowered it significantly before leaving office. If Gore had been elected the end of the debt could now be in sight. Bush deliberately raised the national debt limit upon assuming the presidency and raised it again on Christmas Eve 2002. The debt is now well over $7.6 trillion and rising at a rate of $2.22 billion per day. Your share of this debt, as a citizen of the United States, is currently $26,042 and climbing rapidly.(Link: National Debt Clock)

Cutting back on programs like Social Security and Medicare at a time when jobs and salaries are decreasing is suicidal for this nation. The people who will benefit from Bush’s programs are already rich. The common people will suffer greatly.

A focus on peace and reduction in military spending is the obvious answer to this problem. Will it happen? Nah............................... Not with the current bunch of chicken hawks at the helm in Washington.

We Need a Regime Change --- in Washington