Keep
Spending AND Borrowing
By Duru
December 6,
2004
Today, Press
Secretary Scott McClellan discussed Bushie's plan for
reforming Social Security by allowing workers to invest a small portion of
their funds into private investment accounts. The assumption of course is that
all us millions of young workers are smart enough to invest this money and get
the higher rates of return required to beat out the "safe" return
promised by Social Security. It is now clear that the President is quite
serious now about seeing just how far he can break the bank and burn the
Treasury. Not only will he press to cut deficits by further tax cuts (actually
making current tax cuts permanent), but he has now admitted that some
"transitional financing" will be required to get his privatization
plan off and running. Now, I am no political expert, but I KNOW how hard it is
for the government to stop borrowing once it finds new powers for doing so.
On November
13, 2004 the Wall Street Journal quoted the Concord Coalition as estimating a
ONE TRILLION DOLLAR cost for implementing Bushie's
Social Security plan. A report at the press conference quoted similar numbers
(without naming his/her source). Making tax cuts permanent will also cost many
billions - the Concord Coalition estimates another trillion there. A trillion
here and a trillion there and eventually we ALL get rich!
So, to review….here
is the logic of Bushie-economix:
1.
Borrow as much
as the world will bear (and more) to finance more and more spending. The
Chinese and Japanese are quite generous when so much of their export business
depends on us.
2.
First, apply
borrowings to massive tax cuts.
3.
These massive
tax cuts spur more spending, grow the economy, grow government tax revenues,
and the government grows rich enough to pay off mucho trillions in liabilities
and obligations.
4.
Second, apply
borrowings to prevent bankrupting Social Security as young workers flock to
their brokers to cash in on the next stock market bubble.
5.
These additional
stock and mutual fund transactions make more and more Wall Street brokers and
the like more and more rich, and they use their newfound windfall to spend more
on luxury goods. (Hedge funds will of course try to get legislation passed to
allow them a piece of this trillion dollar action).
6.
The government
gets rich off the extra economic activity in luxury goods and suddenly finds
itself in surplus (probably use the windfall to plot additional incursion to
expand the empire - but it would be nice to use the monies to prop up the
markets after the next bubble crushes all those shiny new retirement accounts).
Absolutely
brilliant! Brilliant I tell ya!
By the way, I strongly
recommend you read the transcript
of the press conference. It is a sad display for what passes for logic and
proof to demonstrate the soundness of a plan: simply repeat your wild
assumptions and conclusions enough times until the gullible finally believe you
and the wiser give up in absolute frustration.
By the way, by
the way, one can only wonder how much of the current rally in the stock market
is due to the market's giddy anticipation of soaking up all the many billions
of new retirement money. It gives me the shivers just thinking about it!