Could President Bush have spared us of his usual garbage on fiscal policy during this Labor Day:
And so the best thing to do is to keep pro-growth economic policies in place as the first step to making sure we’re the most powerful economy in the world. And I think that means keeping those taxes low, letting you keep more of your own money. See, when you have more money in your pocket, you get to spend the money. You get to make the decisions. And the fundamental question facing government is, who best to spend your money, you, or the government? I believe you ought to do it. So we ought to make the tax relief permanent. I like it when people are working for a living, have more after-tax money in their pocket. That’s what I like. And I think that ought to be a policy of the United States government. So to make sure that we’re the economic leader of the world, we got to keep taxes low.
Our graph shows total government purchases relative to GDP over the past 30 years. We heard Bush43’s dishonest spin back in the 1980’s when Ronald Reagan told us we were getting a permanent tax cut. Funny thing – government purchases hovered around 20% from 1976 to 1992. So all Reagan accomplished was to defer taxation until we got a responsible President in office. And let’s remember how many Republicans in Congress and the Senate voted to stop the fiscal bleeding in August of 1993 – zero.
Now it is true that government purchases fell to 17.5% of GDP by the end of the Clinton Presidency. The reductions can be summed up in two words – Peace Dividend. Notice government purchases have jumped back to around 19% of GDP even though the cost of Bush’s Iraq blunder is still not as large in terms of DoD spending relative to GDP as we were fighting the evil empire. So when Bush asks “who best to spend your money”, his answer is Karl Rove.
So when Bush talks about permanently cutting your taxes – he’s clearly being dishonest. Yes, he talks the talk about restraining government spending but he’s too much of a coward to walk the walk. Besides, there is not a single proposal to slash government purchases enough to pay for these tax cuts.
Now I’ll admit some Republicans wish to slash certain transfer payments – such as young worker’s future Social Security benefits. That’ll solve the General Fund crisis only if these workers still pay payroll taxes, which is a backdoor employment tax increase. Besides, slashing transfer payments takes money away from some citizens. In other words, someone’s net taxes will have to rise in order to pay for the reduction in taxes on capital income that George W. Bush has given his rich base. Clearly, young American workers have been screwed by Bush’s fiscal agenda. Could we simply ask the President not to insult these workers by blatantly lying to them on Labor Day?