Thursday, August 05, 2004

Futurama: GWB's Mess,

Daniel Gross of Slate seems to have some of the same thoughts as the oldman, namely that the Kerry Administration is going to be highly limited because of the fiscal nightmare we're staring at.

I expected there would be a concerted effort to ignore the train wreck that has been the Bush administration's fiscal policy at a political convention this summer.

I just didn't expect it at the Democratic Convention...

There are three possible reasons for the Democrats' seemingly conscious effort to avoid direct criticism of Bush's fiscal follies.

The first is that the Democrats have swallowed the Republican line that the deterioration of the nation's balance sheet was more a matter of happenstance than human agency. The recession and stock bust sapped revenues and necessitated tax cuts while the war on terror required higher spending, thus rendering all those forecasts of surplus inoperative. But that's not how it went down. As Daniel Altman convincingly argues in his new book, Neoconomy, the administration's efforts to remake American fiscal policy have been just as radical—and just as calculated—as its efforts to remake foreign policy. The Neoconomists, led by the dour supply-sider Lawrence Lindsey and the more cheerful (and shameless) Glenn Hubbard, possessed of "a revolutionary mindset," used the forecasts of a surplus as an excuse to restructure the tax code. Their goal was to eliminate or sharply reduce taxes on savings and investing and instead finance government activities by taxing wages. So marginal tax rates were cut on the wealthy, the estate tax was slated for elimination, and taxes on dividends and capital gains were slashed. The result: hundreds of billions of dollars of the Social Security surplus spent, hundreds of billions in extra debt, subpar job growth, and structural deficits as far as the eye can see.

And they're not done yet. If the Neoconomists have their way, Altman concludes, "All your income from working would be taxed" while "none of your income from other forms of saving would be taxed." That's a huge relative advantage for those with enough assets to invest and live off of savings and a huge relative disadvantage for people who haven't yet made it. Two Americas, anyone?

One quibble: Altman portrays the Neoconomist revolution as having been accomplished by stealth. But it was all out in the open from the outset. It's just that the financial and political press were unequipped to deal with the Bush economic team's disingenuousness and willfully rosy projections. It's only now, when the woeful results are evident, that the neo-econs are hiding. (There should be a reward for the first person who spots Council of Economic Advisers Chairman N. Gregory Mankiw or National Economic Council head Stephen Friedman in public.)

The second potential reason not to put fiscal policy front and center is that it's political anesthesia. But there's some evidence that fiscal profligacy is resonating in this campaign season. Exhibit A: Peter G. Peterson's Running on Empty: How the Democratic and Republican Parties Are Bankrupting Our Future and What Americans Can Do About It, debuted at No. 13 on the New York Times best-seller list. The former Nixon Commerce Secretary, Concord Coalition founder, and Blackstone Group co-founder has long been a deficit scold. But the book-buying public has snapped up his bitter denunciation of Republicans—and somewhat less bitter denunciation of Democrats...

The third reason is potentially more worrisome. Perhaps the Kerry-Edwards team believes it's not worth highlighting the Bush fiscal mess because the electorate can't or won't grasp the notion that huge deficits today mean higher interest rates, higher taxes, and lower growth and lower government spending tomorrow. Or perhaps some Democrats still assume that when you pit the difficult work of deficit reduction against the siren call of tax cuts, the latter will always win.

There are some though that don't agree that Kerry will win, but they do agree that it's going to one holy mother of all messes out there to deal with whoever wins. (Asia Times)
Two predictions:
1) George W Bush will win a second term as president of the United States.
2) He will be sorry he did

...Dubya will be the president who led the US into a world civilizational war, although it is more precise to say that civilizational war led the US into it. Many will be the night during his second term that Bush will wish he were still in Texas, and still drunk.

In his own unassuming fashion, Bush is a world-historical figure in Georg Hegel's sense of the term - never mind that he does not know who Hegel was. A more thoughtful man would recoil in horror at the choices before him and fade into paralysis...

...if Washington were to sit on its hands until Iran, Pakistan and other Islamic states developed nuclear weapons, the inevitable future conflict would be ruinous beyond imagination. Europe's demographic collapse and the replacement of European Christians by Middle Eastern and North African Muslims present an even deadlier long-term threat.

Washington will choose preemptive war. Narrow-minded but principled, trusting no one's judgment but his own, petty and ruthless, George W Bush is the man of the hour. The Weltgeist will give him a second term.

Those are the characters in the next act of the tragedy, and their motivations. The role of tragic lead falls to George W Bush, who will be re-elected and regret it.

Well if that doesn't beat all heck out of things. Perhaps the Dem's want to lose this one, so they don't have to inheirit GWB's mess. That way lies despair though. No matter how ugly it is, we're going to have to roll up our sleeves and clean it up. Certainly, GWB and company can't be counted on to come their senses and eschew madness for sanity.

I just want to get this out there though, so people aren't thinking a Kerry victory will make things better. A Kerry-Edwards Administration is going to have to spend the next decade - Kerry's two terms and most of Edward's first one - just cleaning up GWB's mess. That's being optimistic. However I think it's the only chance this nation has to avoid either civil anarchy or complete meltdown. It'll be bad as it is, with what I see was probably no less than two more wars thrown into the mix to boot. Grim times, my friends, they are grim times indeed.


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