Economy:
I will be adding here shortly. Let it be noted that the US Dollar has fast become worth-less and now inflation is off and running. The tax break for the rich,,,,, simply gave them money to invest in China, India and the Euro and other foreign economies which are profitable.
If the administration had upped the minimum wage, it would have generated immediate purchasing into our economy.
He didn't and the economy is hurting.
1. Energy, We are running out of OIL
3. Deep Shade of Red Seen in Deficit
5. Another, war and than PRIVATIZE
Deep Shade of Red Seen in Deficit
By Warren Vieth Los Angeles Times
Wednesday 08 September 2004
The shortfall will reach a record $422 billion this year and $2.3 trillion in
the next decade even without further tax cuts sought by Bush.
Washinton - The federal deficit will hit a record $422 billion this year and
$2.3 trillion over the next decade even if Congress does not enact any of the
additional tax cuts President Bush is seeking, the Congressional Budget Office
said Tuesday.
Making Bush's previous tax cuts permanent would nearly double the 10-year
shortfall to $4.5 trillion, the nonpartisan agency said. Proposals to partially
privatize Social Security and scale back the alternative minimum tax, both of
which have been endorsed in principle by the president, would add even more red
ink.
The agency's estimate of the deficit for this fiscal year, which ends Sept. 30,
was revised down from a March prediction of $477 billion, mainly because income
tax collections have been higher than expected. But the agency raised its
10-year deficit forecast from $2 trillion, primarily to reflect additional
spending authorized by Congress.
Although the revisions were not huge, the new figures became instant fodder on
the presidential campaign trail. Democrats used them to criticize Bush's
economic policies, while Republicans said they showed the president's tax cuts
were boosting the economy.
"Last week the Bush administration said outsourcing was good, yesterday George
Bush said the economy was great, and today George Bush is celebrating a record
federal deficit," Democratic presidential nominee John F. Kerry said in a
statement. "W stands for wrong, the wrong direction for America," he said,
referring to the president's middle initial.
Vice President Dick Cheney countered that the president's tax cuts deserved
credit for reducing this year's deficit projection because they stimulated the
economy. "We're beginning to see the resumption of economic growth in a fairly
significant way," Cheney told supporters at a campaign stop in Des Moines.
The deficit would be a record in dollar terms, exceeding the record set in 2003
when the shortfall was $375 billion. As a share of the national economy,
however, it is smaller than the deficits of the mid-1980s and early 1990s. At
$422 billion, the 2004 deficit is equal to 3.6% of the nation's gross domestic
product, compared with a post-World War II record of 6% set in 1983.
Although there is little evidence that the national debt ranks high on voters'
list of election-year concerns, economists said the risks of burgeoning deficits
were substantial.
"If you have deficits like this, the debt just keeps rising and rising and
rising relative to GDP," or gross domestic product, said Susan Hering, senior
U.S. economist in Chicago for UBS, a financial services firm. "It's not a stable
situation."
Higher budget deficits intensify the competition between the government and
private borrowers, driving up interest rates, she said. "That means you crowd
out private investment.... So voters should care," Hering said.
At this point, congressional accountants are slightly more optimistic about this
year's deficit than their counterparts in the Bush administration. In July, the
White House Office of Management and Budget estimated the deficit would reach
$455 billion this year.
Independent budget experts say the size of this year's shortfall is less
important than the long-term budgetary outlook. Although both presidential
candidates state their intent to reduce the deficit as a percentage of the
economy, neither one is offering a plan for putting the federal budget back in
the black.
The CBO said it did not attempt to estimate the budgetary effect of Kerry's
campaign proposals. The Democratic nominee wants to extend most of Bush's tax
cuts for the middle class but rescind those for wealthier taxpayers. Yet several
independent economists have said that any savings that would accrue would
probably be offset by Kerry's proposals to increase spending on healthcare and
education.
Robert Greenstein, director of the liberal Center for Budget and Policy
Priorities, said it appeared that the 10-year cost of Bush's economic platform
was slightly greater than the cost of Kerry's campaign promises. "But under both
sets of proposals, the nation would face significant problems over the next 10
years and beyond," he said.
According to the CBO analysis, extending the Bush tax cuts that are scheduled to
expire by 2011 would add $2.2 trillion to the 10-year budget deficit. Scaling
back the alternative minimum tax, which is affecting an ever-bigger number of
middle-class taxpayers, would cost another $425 billion under one reform
scenario.
The alternative minimum tax was created to ensure that wealthy people did not
escape income taxes entirely by claiming deductions, but the income level that
triggers the tax was not indexed for inflation.
The CBO did not estimate the cost of partially privatizing Social Security,
which Bush has endorsed in principle without offering a specific proposal.
But independent analysts estimate it would cost at least $1 trillion over 10
years to replace the payroll taxes that would be diverted to private accounts
under the kind of plan the president appears to favor.
Although faster-than-expected economic expansion might trim the long-term
deficit, CBO Director Douglas Holtz-Eakin said it would be next to impossible
for the nation to grow its way out of deficit spending.
Even if Bush's tax cuts were allowed to expire and nothing was done about the
alternative minimum tax, the looming retirement of the baby boom generation
would cause deficits to swell as Social Security and Medicare trust funds were
gradually depleted, he said.
The deficit debate on the campaign trail was echoed on Capitol Hill, as
lawmakers returned from their August recess to grapple with unfinished
appropriations bills for the 2005 fiscal year, which begins Oct. 1.
"This is the worst budget deficit in the history of the United States," said
Sen. Kent Conrad (D-N.D.), ranking minority member of the Senate Budget
Committee. "And the president is proposing to make it even worse.... We're on a
course that is utterly unsustainable, and the consequences to our nation are
enormous."
Senate Budget Committee Chairman Don Nickles (R-Okla.) said the CBO report
proved just the opposite. "The president's economic policies are working," he
said. "Economic growth is significantly strong, tax revenues are rising, and
deficits this year and next are much lower than previously projected."
Yet political analysts said concerns about the federal deficit appeared to have
taken a back seat to other campaign issues, such as the conflict in Iraq, the
war against terrorism, job creation and healthcare.
"There's just no indication the deficit has any intensity in this campaign,"
said Karlyn Bowman, a polling expert at the conservative American Enterprise
Institute. "It's just not on the radar screen for voters."
http://www.truthout.org/docs_04/090904X.shtml