Bush's Economics Unsustainable

"Conservatives – never all that comfortable with the moderates of the party anyway – are starting to shift in their chairs, and many would leave if they had a place to go," writes Brendan Miniter, assistant editor of the Wall Street Journal's OpinionJournal.com Web site.

Miniter is referring to the anger among Republicans over Bush's escalating budget deficits and double-digit spending increases over the past three years. "Today," says Miniter, "the party is morphing into what it once sought to unseat – big-spending politicians, interested only in holding onto power."

In "Spending Like a Drunken Democrat: Bush drives the nation towards bankruptcy," Peter Eavis warns in the Feb. 16 issue of The American Conservative that the current explosion in government spending is putting the United States on the road to insolvency.

"Forget the liberation of Iraq, George W. Bush will be remembered as the president who bankrupted America," writes Eavis.

More officially, an appendix chapter titled "Stewardship" in President Bush's 2005 budget paints an alarming picture of what Americans are in for in the long run. It forecasts a nation where more than half the income of future generations will be socialized by the federal government, with federal spending rising from approximately 20 percent of the gross domestic product this year to 53 percent in 2080.

Add another 20 percent for state and local taxes, and what that's saying, straight from the White House, is that tomorrow's workers will be expected to live on two hours of take-home pay out of every eight-hour workday. Dutifully, in other words, they'll be expected to show up at the nation's offices and factories each day at 9 a.m. and watch every dime they've earned until 3 p.m. disappear into the government's coffers. In a word, it's a scenario that makes current budgetary trends, as the budget itself puts it, "unsustainable."

Much of this projected long-term increase in federal spending comes from interest on the debt, the result of today's red ink and the nonstop deficits that the 76 million-strong baby boomers will generate once they begin retiring.

It's projected that the price Americans will be paying in interest payments on the federal debt, measured as a percent of national income, will be equal to what we're now spending on everything at the federal level – equal to what we're currently spending on defense, homeland security, education, agriculture, health care, transportation, research, transfer payments, interest, Social Security and Medicare combined.

Bottom line: George W. Bush entered the presidency following three consecutive budget surpluses – a $69.2 billion surplus in fiscal 1998, a $124.4 billion surplus in 1999, and a record $237 billion surplus in fiscal 2000. The forecast at the time was for a federal surplus of $4.6 trillion over the next 10 years. Today, the Congressional Budget Office is projecting a buildup of $2.4 trillion in red-ink spending over the next decade, a $7 trillion switch.

The war on terrorism, of course, has hiked defense spending, but the Bush administration has made little attempt to bring nonmilitary spending under control to offset the higher Pentagon budget. Non-defense discretionary spending, for instance, which decreased by 13.5 percent under Reagan, increased by 23 percent in the past three years. And what's next is a flood of red ink for the new prescription drug program, the largest jump in entitlement spending in 40 years, plus some further federalization of education, more skirmishes in the drug war, a man on Mars, new bonuses for marriage, more subsidies for religion, a new parrot jungle in Iowa and some hefty federal handouts for a string of new ice skating rinks in Alaska.

The result? Overwhelming debt burdens and impossibly high tax rates for future generations. And a warning from David Boaz at the Cato Institute: "Bush and his aides should be worrying about the possibility that libertarians, economic conservatives and fed-up taxpayers won't be in his corner in 2004 in the same numbers as 2000. Given a choice between big-government liberalism and big-government conservatism, the leave-us-alone voters might decide that voting isn't worth the trouble."

February 18, 2004

Ralph R. Reiland is a Pittsburgh Tribune-Review columnist and the B. Kenneth Simon Professor of Free Enterprise at Robert Morris University.

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