"Voodoo Economics Jr." editorial, Daytona Beach News-Journal
There was a lot of gloating out of the Eisenhower Executive Office Building on Wednesday. President Bush was talking up the state of the economy and the budget at midyear, and predicting a budget deficit of about $200 billion by year's end, down from $248 billion last year, and a surplus of $33 billion in 2012. "The policies of low taxes and spending restraint have produced a clear and measurable record of success," he said. "You can't argue with what I'm telling you. These are the facts."
Well, they're his facts, anyway. You can argue with what he's telling you, because some of his facts are wrong, and some are smokescreens. Bush is among the wildest-spending presidents in the history of the nation. Discretionary spending -- that is, spending unrelated to mandatory spending out of his control, like Social Security and Medicare -- increased 57 percent in just five years on his watch, and counting. It took Ronald Reagan, the previous big spender who always preached fiscal discipline, eight years to increase discretionary spending by 59 percent. (Spending increased 14 percent in Bill Clinton's eight years.)
Bush is taking credit for reducing the deficit. But that's like a thief stealing the Mona Lisa, then trudging back to the Louvre in triumph five years later and saying, "Here's half the painting, anyway. Now call me a hero." Bush came to office after Bill Clinton spent the previous eight years cleaning up the budget mess and deficits left by Reagan and Bush's father. Clinton inherited a $290 billion deficit. He handed Bush a $236 billion surplus, which Bush promptly turned into record-breaking deficits again thanks to reckless and unneeded tax cuts that overwhelmingly favored the rich. "During the time when we cut taxes to today," he said, "our economy has grown by more than $1.9 trillion. This amount is larger than the entire economy of Canada."
Actually, if the deficit ends at "only" $200 billion this year, that'll bring the combined deficits of the Bush years to a staggering $1.6 trillion, also an amount larger than the entire economy of Canada. The more telling number is the growth in the federal debt: $3.1 trillion during the Bush years alone. That's more than the entire economy of China -- an appropriate comparison, considering how much Bush has compromised the American economy's fundamental soundness now that foreign governments like China own so much of Americans' public debt.
Yes, the economy grew in the last five years, adding more than 8 million jobs. But consumers and government powered the economy on an unprecedented borrowing-and-spending binge, helped in good part by a real estate bubble manufactured by Federal Reserve policy. The bubble has burst. Debts define the colossus that is the American economy. There's little to no wiggle room should the economy take a downturn. "That's how the economy works," Bush said. "When you've got more money in your pockets to save, spend or invest, this causes the economy to grow."
That's assuming that the money in your pocket is yours to spend. A national debt approaching $9 trillion, or 70 percent of the size of the economy, says the money isn't quite yours, while the economy is growing literally on borrowed time.
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