RSS Output
French    German    Spain    Italian    Arabic    Chinese Simplified    Russian

Letters by a modern St. Ferdinand III about cults

Gab@StFerdinandIII - https://unstabbinated.substack.com/

Plenty of cults exist - every cult has its 'religious dogma', its idols, its 'prophets', its 'science', its 'proof' and its intolerant liturgy of demands.  Cults everywhere:  Corona, 'The Science' or Scientism, Islam, the State, the cult of Gender Fascism, Marxism, Darwin and Evolution, Globaloneywarming, Changing Climate, Abortion...

Tempus Fugit Memento Mori - Time Flies Remember Death 

Back     Printer Friendly Version  

Bookmark and Share

Wednesday, May 25, 2005

Bush’s Fiscal Policy is Wrong

by StFerdIII

Bush is right on many things, but wrong on some key economic ideas. Tax cuts are necessary but you can’t cut taxes and increase spending. Both the US and Canada are over-taxed and spend money irresponsibly. Everything but breathing is taxed and every interest group, lobby group, program, minority and politically vital project is funded. The US and Canada are flooded with wasted monies.

In
Canada government’s at all levels are raising taxes and increasing spend. Toronto’s budget growth is 6 % per annum in spending increases, while taxes go up on average 3 % per year. These seem marginal but accumulate rapidly over 4-5 years. Ontario’s spending budget is growing 8-10 % per annum far outpacing revenues. Federally the budget spend growth outpaces GDP growth by a factor of 2-3 x on average per year. Total national debt in real dollars has increased in the past 10 years and unfunded liabilities for pensions, health and other worthies has soared to over a Trillion dollars in future debt.

The
US fares little better. Tax cuts are necessary to stimulate investment and jobs and starve rapacious governments and smiling well coiffed politicians who use your money to buy your vote. There is something akin to insanity in allowing governments to appropriate 40-50 % of a person’s income per annum. Bush’s tax cuts constituting $3.2 trillion in necessary relief will be made permanent. But it is his non-military spending that is driving real Conservatives to cry wolf.

Bush and Congress have control over $2.5 trillion in spending. About 50 % is for the sacred cows of Medicare, Medicaid and Social Security. The portion of the budget Bush wants to restrain, domestic discretionary, represents a small portion — $389 billion — of the $2.5-trillion budget. Until the US Congress is ready to significantly cut the mandatory side of the budget deficits loom far into the future. Mandatory programs need massive reform, privatization [US Health Care is NOT a free market system with over 50 % of health spend controlled by the government], and budget reductions. Coupled with discretionary budget cuts, a growing economy thanks to tax cuts and reduced government the
US COULD balance its budget. But Bush and friends have little real interest in budget reductions. A case example is the increases in Medicaid spend by $70 billion per annum, in part to buy the votes of seniors dependent on government subsidies for drug purchases.

Bush talks about government reduction but his words are not matched by deeds. Bush's previous budgets increased spending by a dramatic 33 percent in four years, defense spending increased by 44.7 percent while non-defense spending increased by 41.9 percent. Bush and friends argue that much of the increase in non-defense spending is due to homeland-security spending. But this is wrong. Over half of all new spending in the past two years is from areas unrelated to defense and homeland security. As well even in defence and homeland security budgets, economies are not being sought and money is dispensed in all directions to huge government agencies with little accountability on results achieved.

Bush declared that his reforms would close 150 departments or groups and save about $20 billion in fiscal 2006. This is great – but sadly his budget spend will increase by more than $2.5 trillion over the coming 4 years. No cuts to any large department exists – Education, Health, Transport, Subsidies– and indeed all share in greater budgets. The past four years will reflect the coming four years:


-National Education spending in the US under up by 60 %
-National Spending on labor by 56 %
-Department of the Interior [not Homeland Security] budget up 25 %
-Medicare reform = $70 billion per annum for 10 years
-Agricultural subsidies - an extra $10 billion per year to around $70 billion per annum
-2005 Highways bill will spend $235 billion over 10 years laying asphalt in various politically sensitive areas

The result is massive Federal Budget deficits and growing government. These facts more than the trade deficit, has impacted the U$ and faith in the
US economy. The Democrats are being given a gift for the next Presidential race – fiscal recklessness and Conservative spending largesse – in fact deficits are hitting all time highs.



Bush pledges to reduce the deficit in half from $427 billion in 2005 to $223 billion by 2009. He will never do it. Bush and friends leave out important items from the calculation, such as the additional costs in ‘05 for
Iraq and Afghanistan, which could hit $80 billion in 2005 alone and which will certainly be added to costs in 2006 and beyond. The US will not be leaving Iraq or Afghanistan any time soon. As well Bush’s numbers do not include any of the potential transition costs for restructuring Social Security, which in 2006 and beyond might add a few hundred billion more to budget deficits.

The Central Budget Office in the
US has already stated that the tax cuts and spending increases passed by Congress will contribute $504 billion to the government's overall forecasted debt between 2005 and 2014. Such an accumulation of debt and spending increases is fiscally irresponsible. Budget deficits coupled with tariffs, anti-dumping fees paid back to industry, and questionable commitments to open and free trade is bad politics and unsound economics. Bush needs to reduce government, reduce taxes, reduce spend and close entire agencies and programs. Action not words is needed.

Some sources:
WSJ Public article
CBS News

CraigRead.com ©


Article Comments:

Related Articles:

USA - cult of big Gov't

11/13/2014:  Central Bank cult, free money, no interest rates....Keynesian nirvana

9/8/2014:  Stockman and the cult of central banking

3/26/2014:  The cult of government and micro-managing the economy

1/29/2014:  Globaloneywarming and Economic illiteracy

1/28/2014:  Bernanke and the next great implosion[s]

4/13/2013:  Economist-Quacks ''Assume a Perfect World'

12/5/2011:  Statism. The inexorable rise of big nanny government since 1947.

9/9/2011:  Obamism and the failure of the Keynes model

8/21/2011:  The 2011 Recession.

8/8/2011:  Only the media and the politicians are surprised by the financial meltdown.

5/12/2011:  Old age transfers and bankruptcy.

5/10/2011:  GDP calculations are wrong

4/23/2011:  Inflation and debt.

4/18/2011:  Why does America still have a Triple A credit rating?

4/15/2011:  Cut government in half or see your taxes double.

4/14/2011:  US debt and the Republicrats.

1/10/2011:  Unions, the surest path to failure and bankruptcy.

11/5/2010:  Central Bank madness. Another bubble is guaranteed.

10/29/2010:  Economist Kotlikoff: 'US is bankrupt.' We know.

10/25/2010:  Regulations and government killing local jobs. Choquant!

2/17/2010:  Government stimulus programs only stimulate government not jobs

2/5/2010:  Economic Lies – US GDP ‘Growth’ [Hardy Har Har]

1/14/2010:  Government created stock fraud.

1/10/2010:  Politicized Central Banks do not control inflation.

10/6/2009:  The Empire's decline is forecasted in its dollar.

8/25/2009:  Governments caused this 'crisis'.

8/22/2009:  The Chairman's failure - Government 'Stimulus' never works.

7/16/2009:  Obama Health Care – a very sick idea.

4/9/2009:  The Real Estate bubble of 1815-1819

3/24/2009:  A contrarian view on Obama's bank bailout and spending plans

3/13/2009:  Economists Fail Prophet Obamed.

2/10/2009:  Stimulating nothing but fear, big government and Obama's left wing addictions

11/29/2008:  The Black Jesus and the old, 'New Deal ' to 'create' 2.5 million jobs!

11/23/2008:  Keynesian economics is a failure.

5/2/2008:  Recession evidence is now finally here and it will be nasty.

4/13/2008:  Who are the 'poor' exactly?

1/3/2008:  We need tax cuts not massive interest rate cuts.

11/13/2007:  US Income mobility is strong

11/9/2007:  The Empire's declining dollar.

10/31/2007:  America vs. Europe

10/14/2007:  The Mommy-State cult

9/10/2007:  Tales of market woe and pain: Blame the Fed

8/17/2007:  Conrad Black Deserved to Fall

8/24/2006:  Supply side economics works

5/12/2006:  Illegal immigration is a net drain on society

8/17/2005:  US Protectionism – Steel Tariffs, the Byrd Amendment and now Lumber

7/15/2005:  US Revenues are up, deficit is down, but no media reports

5/25/2005:  US Savings and Net Assets Highest in the World

5/25/2005:  Bush’s Fiscal Policy is Wrong

4/25/2005:  The US Economy – rising expectations

3/25/2005:  Why Trade Deficits Don't Matter

1/4/2005:  Why the US$ will go up

11/15/2004:  Jobs, Jobs, Jobs