Burnt Orange Report

Oh so witty

By Nathan Nance

Guest post by Nate Nance

When it comes to budget busting deficits, George W. Bush is king. He has spent so much money in authorizing spendings bill after spending bill and tax cuts for the wealthiest every year that we now have structural deficits for the forseeable future.

So it's actually kinda surprising to me that he thinks deficits are a problem. Anyone who has read Price of Loyalty remembers that famous quote from Dick Cheney, "Reagan proved deficits don't matter." Which explains why Reagan raised taxes 6 times between 1983 and 1989. The first Bush had to raise them twice and Bill Clinton had to do it again in 1993 before we got out of those defecits. I guess they matter enough to make Reagan raise taxes.

After his two day economic "summit" he had some interesting things to say about "reasonable tax policy" and spending and the like.

U.S. tax policy is indeed a mess, and there is a lot of complicated math involved in sorting out the budget and appropriating money. But the simple truth is Bush's "fuzzy math" is what got us into this. His tax policy seems to be we need to take in less money and then spend more and everything will be cool. If I did that with my checking account without the Chinese to bail me out, everything would not be cool. We're living on credit from a communist dictatorship so that we can cut taxes for the top 1% with smaller cuts in income taxes for those below that line. I've yet to actually see any real evidence that cutting taxes for the wealthy actually leads to real economy growth through investment.

If you want to cut taxes (I hate paying taxes, too), cut them for middle class people who will spend the money. The first thing middle class people do when they get money is spend it, which will get us to another discussion on Social Security and retirement at a later date. But middle class people are the driving force of the American economy. They took those $300 checks and bought new cars and new homes and kept this country afloat through the 2001 recession.

The only other economic model I can think of that works are New Deal-type government investments. Large public works projects where the federal government is the chief contractor and puts money directly into local economies by hiring workers and buying materials from that area. But that is more of a labor thing and our economy is more technlogy and information-centric these days. I can't imagine a computer-programmer who just lost his job to outsourcing jumping at the chance to build a big dam or something.

But now we get to the real nitty gritty. Somewhere along the line, we are going to have to raise taxes. If we keep borrowing money, we will eventually have to pay it back, and with deficits that are structural, like the Bush ones, we would be borrowing money to pay back the money we borrowed plus some to cover our expenditures for the fiscal year. After a decade or two, people will realize we don't actually have any money and quit lending it to us. Actually, it's more like having bad credit, they'll still lend it to us, but they will want more interest than the Treasury bonds they are buying yield for the risk in investing in us.

All of this could be avoided if we had people who could balance a damn checkbook working in the White House. Hopefully we get some sane people in charge of economic policy in the next decade and we might begin to turn ourselves around and we could get back in the black by the time Social Security is supposed to collapse and destroy the Western world. Probably by then, the aliens will have taken over and destroyed our planet anyway, so there's no point in worrying about it.

This is a guet post by Nathan Nance. Nate is a sports/news clerk at the waco Tribune-Herald and writer/editor of Common Sense a Texas-based Democrat Web log. He can be reached at nate_nance@yahoo.com