Keep Spending AND Borrowing
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!