Tuesday, February 07, 2006

US Budget: A Titanic Cruise

Original link: http://www.pierretristam.com/Bobst/Archives/CN020706.htm

The United States under George W. Bush is beginning to bleed like France in the latter years of Louis XIV: wars, deficits, economic miracles turned sclerotic. At least Louis had Jean-Baptiste Colbert, a Karl Rove of economics, to stave off bankruptcy. Then Colbert died. Bush fired his Colbert (Paul O’Neill) and replaced him with economics’ equivalent of Chunky Monkey: dessert rhetoric, no beef. The bills are coming due. The accountants are still playing with Monopoly money. The Congressional Budget Office’s latest projection is of a $355 billion budget deficit for 2006. That assumes “ongoing military operations in Iraq and Afghanistan, but no other legislation affecting spending or revenue.” The Bush administration’s latest “supplemental” war funds request, for $120 billion, brings military operations to $10 billion a month—Twice the monthly cost of the Vietnam War. Last May, the estimates of Iraq’s costs were around $5 billion a month. In 2003 the estimates of both Iraq and Afghanistan’s bills were around $5 billion a month. And in 2002, of course, the Bush administration fired anyone who dared suggest that war would cost more than $60 billion. So now we’re approaching the half-trillion mark, making the Nobel laureate Joseph Stiglitz’s cost projection of $2 trillion when all is said and killed not that outlandish. To most people all this is known history. It’s worth repeating in light of Monday’s release by the Bush administration of its 2007 budget—a $2.77 trillion atrocity of America turned on its head: A military budget well in excess of the half trillion mark (because as always the $440 billion budgeted for “defense” doesn’t include that $120 billion “supplemental”), cuts in Medicare and other social services, and a projected budget deficit of $423 billion, a new record, eclipsing 2004’s $413 billion. And what’s the president asking for? More tax cuts. Madness has its consistencies. But so do economic laws: the last time Americans had a negative savings rate for this long was in the Great Depression. This during an allegedly strong economy, when GDP looks muscular, unemployment and inflation seemingly still snore. But certain numbers and traditions don’t lie. As goes General Motors, so goes America: we’re bankrupt. Our economic numbers only look strong. They’re all flab. Unlike Ronald Reagan and the first George Bush, who smarted up when their historic deficits began smothering the country, this Bush is steaming ahead with more of the same. His madness may be consistent. But he’s only the pusher. Congress is the enabler. Congress is the junkie. And we’re its crack whores, ready as ever to blow it back into office with a 97 percent success rate. So goes America’s gift to the world: A Titanic of an economy, readying to take everyone down.