In times of surplus, tax cuts are commendable-after all, excess means the government has more than it needs and should return money to the people. When fiscally feasible, tax cuts are great for spurring the country out of a slump. But when the federal deficit reaches record-breaking proportions, tax cuts for the wealthy are more than irresponsible-they’re ridiculous. With a huge deficit, an uncertain economy and countless ailing government services, it’s early to gloat about Bush’s tax cuts saving the day.
The president’s most recent round of tax cuts came when the country faced unprecedented, astonishing budget deficits coupled with the unknown costs of a never ending war. Logically, a time of war should be a time of preparation, bolstering the country’s reserves in anticipation of impending expenses. You’d expect leaders in Bush’s situation to be fiscally prudent now, generous with the country’s surplus money later.
Reasonable leaders, suspicious of taxes or not, would realize that national security takes priority over padding the pockets of the already affluent. Not our president. The Bush administration threw caution to the wind and combined unmatched deficits with unrivaled tax cuts. The strange timing-tax cuts coupled with huge deficits during a time of war-alarmed liberals and conservatives alike.
But the problem’s not just bad timing: It’s the wrong sort of tax cut. Reagan’s trickle-down theory didn’t work. Nothing trickled (except maybe the deficit as it crept into subsequent decades). The numbers are startling: Almost 50 percent of Americans received tax cuts of less than $100, yet Bush’s enormous tax cut pushed the deficit to a bewildering $400 billion. Big tax cuts for the wealthy mean big deficits and little else, the whole supply-side theory is a joke.
Liberals and conservatives alike are praying for economic recovery, but the outlook isn’t good. Bush’s out of-touch-with-reality federal deficits damage the economy in the long term, saddling the government with record debt as the rich get richer.
Unfortunately, here’s the part many conservatives miss: Spending cuts need to be offset. That is, when the amount coming in decreases, the amount going out needs to adjust accordingly. Yet instead of trimming the federal budget to make up for colossal tax cuts, the White House continues to spend in full force in its pet areas (like defense spending) while shrugging off vital services as insignificant (like health care, education and Social Security).
The result? A sluggish economy burdened by a ballooning deficit that shows no signs of slowing down, while valuable national programs (on which millions of Americans depend) remain inadequately funded. Short term growth is exciting, but the country’s economic fortune remains uncertain, and thanks to the revenue-to spending gap, basic government services like Medicare and Social Security face a precarious future.
The Center on Budget and Policy Priorities estimates the annual interest payment on the national debt will reach $470 billion by 2010. That’s $470 billion a year future generations will be forced to shoulder because the top 1 percent of Americans didn’t have to pay taxes on their investment gains. That’s $470 billion the country can’t invest in Social Security because it’s reserved to pay interest on a poorly timed, poorly structured tax cut that shifted the tax burden to middle-income Americans. It doesn’t make sense.
The economy is too complicated and too dynamic to give one person sole blame (or credit) for its condition, but President Bush’s economic policies are largely inconsistent and frightening. It’s not that Bush “wreaks economic ruin with his words”-it’s his unreasonable priorities, his startling spending habits and his irrational policy decisions. I hope the economy recovers, but Bush’s groundless spending (including the wrong tax cuts at the wrong time) hurts the economy by creating a deep-seated disparity between the government’s revenue and its expenses that will have disastrous social and economic consequences.