April 14, 2008
Column: The fiscal consequences of the Bush administration
Competition for “most damaging legacy of the Bush administration” is lively. Iraq is the front-runner, of course, but bear in mind the wreckage of fiscal policy – although to use that term is to imply that the US even has a fiscal policy, when it does not. It would be more accurate to talk of fiscal consequences or fiscal footprint (an apt metaphor) than to imply anything as deliberate as “policy”.
All three presidential contenders criticise the administration on this, but none is offering much improvement. The Democrats remind the country that in the late 1990s the Clinton administration ran a budget surplus. With ill-designed tax cuts and reeling indiscipline on spending (partly, but not only, because of the war) the Bush administration turned this into a deficit. Barack Obama’s answer is the same as Hillary Clinton’s: undo the tax cuts and then raise spending by even more. John McCain, the Republican nominee and supposed fiscal conservative, is against raising taxes and promises to get spending down instead – but will not say how to do it.
The whole debate rings hollow anyway, because most Americans think it has nothing to do with them. The Democrats are promising to raise taxes only on the rich: the country’s vast middle class expects to be unaffected. And as long as Mr McCain declines to explain exactly how he will curb spending (aside from attacking earmarks, the special interest spending projects which in the larger scheme of things are trivial), voters will be equally blithe about that side of the calculation too. Everyone can deplore the fiscal incontinence of the Bush administration and hardly anyone need worry about what restoring fiscal control might require. In this, as in other areas, the thinking boils down to: “After George W. Bush, everything will be fine.”
The remainder of this column can be read here. Please post comments below.
The wise strategic advise, which can be addressed to the White House administration, is to cut the current spending directed to support the selected preferable market players and start to work on the development of new state policies, which will govern the recovery process in the US economy.
Posted by: Viktor O. Ledenyov | April 14th, 2008 at 5:30 pm | Report this commentIt is indeed hard to tell what is the worst part of the Bush/Cheney “legacy”. Is it the economic mess, the Iraq war, or the threatened loss of our most basic freedoms? One can find a connection among all three of these, however. The financial meltdown is the direct result of tax, corporate welfare and regulatory policies (or the lack thereof) favoring the wealthy elite and driving millions of Americans closer to poverty than at any time since Hoover. The same can be said for the war in Iraq, where, no matter what the cost in wasted spending and human life, the big oil companies have been patiently waiting to cash in on lucrative contracts with the Iraqi government (see the April 14 FT).
The loss of freedom is also connected to unprecedented secrecy by our illegal, unconstitutional “unitary executive”, making it difficult for the public or the other branches of government to conduct necessary oversight. Even more, it is connected with “war on terror” policies of arbitrary arrest, torture, rendition, denial of habeas corpus and unlimited surveillance which, far from making America safer from attack, are designed to intimidate critics of our lawless administration, as is likely to become more and more clear in the future unless this country changes its current disastrous course toward plutocratic, authoritarian rule.
Posted by: algasema | April 14th, 2008 at 6:31 pm | Report this commentmr. crook says value added taxes are providing
Posted by: andrew hartman | April 14th, 2008 at 8:18 pm | Report this commenta high and growing share of euro-state revenues,
and lack of such in the u.s. means projected
income tax increases that are not politically
possible. but wouldn’t high value added taxes be
just a huge, regressive sales tax? and how would
that be politically possible among progressives,
who hold the idea that most taxation should hit the
rich harder than everyone else?
Americans have been spoiled by many years as the world’s leading economy during the age of manufacturing.The techno-global revolution has put American complacency on display.We produce less and consume more. We borrow to buy, in both instances from trading partners.We have suffered fools in the Whitehouse and at the Federal Reserve because they have promissed prosperity with little effort or sacrifice.Our national treasures of fiscal solvency,monetary sanity,international respect and soldier’s lives have been squandered and we have barely batted an eye.We flocked to the false wealth of stock and housing bubbles.We have a vouyer economy where the bets in the derivatives markets are greater than the real economy wagered upon.Our credit markets have frozen under the weight of one too many ponzi schemes.Banker’s and broker’s right to enormous wealth is protected by the Fed and Treasury not because they provide some invaluable service or wisdom but because we have allowed them to become too big to fail.Wealth has become concentrated in the pockets of far too few and middle class America is traded for cheaper labor across our borders.Middle America escapes reality in nightly trips to American Idol and the feel good fantasy of Oprah’s book club.Real news has been replaced by infotainment controlled by a handful of wealthy individuals and corporations. We lag the world in education.We have become lazy and have no appreciation for our past good fortune.What other explanation can there be for the most gifted nation in the history of the world squandering so much with so little concern.How else can we explain W being elected TWICE.
Posted by: gym-bob | April 15th, 2008 at 4:28 am | Report this commentJust a couple of questions, really:
Why is the US tax base ‘narrower’ than other rich nations?
When we say ‘the US has a small state’ do we mean just the federal budget or federal plus states budgets?
Posted by: David | April 15th, 2008 at 3:20 pm | Report this comment[…] for ‘most damaging legacy of the Bush administration’ is lively": FT.com | Clive Crook
Posted by: The Bush Presidency: The Historians (Start to) Weigh In - Page 2 - Early Retirement Forums | April 16th, 2008 at 5:41 pm | Report this commentIt is not enough for the biased media and the Democratic party to attack George W. Bush for the entire length of his presidency. They are already preparing to attack his legacy. Where does this hatred come from? When I was growing up I was taught not only by my parents but by my teachers to respect the president of our country. I could only imagine how long that walk to the principles office would have been if I were to have openly called our president a murderer and liar. I guess times have changed and our morals have gone out the window. The need for power and to promote political agenda are far more important to some of us than to adhere to any morals. If this doesn’t get posted I understand that views like mine are far less important than the views of the Democratic party and the biased media.
Posted by: Richard J. Riveros | April 16th, 2008 at 6:11 pm | Report this commentWe’ve had 5 years of record job growth, and 1 month of (relative) job loss. The media completely ignores the 5 years, and concentrates only on the bad month. Inflation was 0% in February, and annualized 3.6% in March…the FT crows “Rising prices add to US consumer woes”. At one time 3.6% was considered miraculously low.
JBP
Posted by: John Powers | April 16th, 2008 at 7:04 pm | Report this commentRichard J. Riveros, in a democracy, even the President has to earn the respect of the citizens of his (her) country. How much respect did you have for Nixon when he resigned after Watergate? (I assume that you know what Watergate was).
George W. Bush has been far, far worse, than Nixon in his lack of respect for the law, as shown by his lying, approval of torture, denial of habeas corpus, warrantless spying, unprecedented governmental secrecy and invasion of Iraq, a country that posed no threat of attack against us (or anyone else at the time America invaded) and whose invasion, as Joseph Steiglitz concludes in his recent book, has benefited no one except the oil companies and defence contractors. What kind of “Legacy” is this?
Posted by: algasema | April 17th, 2008 at 12:41 am | Report this commentalgasema,
George W. Bush was attacked from day 1. He had no chance to earn respect. Remember in the eyes of the Democrats and the biased media he stole the election from Al Gore. Your rants are exactly what I am talking about. Any legacy is made by history and not manipulated and molded by the media or the opposite party.
The problem with this country is the letter in brackets after the politicians name. I wonder how you would feel about George W. Bush if he had this behind his name (D).
Posted by: Richard J. Riveros | April 17th, 2008 at 4:16 pm | Report this commentNonsense,
Abuse of prisoners is as old as the United States of America. Nothing unique about Bush. The modern bias that somehow prisoners of war are not subject to extreme treatment is just that, a bias.
German POW’s were routinely shot by the Greatest Generation. Japanese POW’s were butchered wholesale in Korea (then used in a police function later, go figure). Vietnam, ugh.
A relatively judicious use of extreme conditions takes place in the 21st century, and our media is shocked! that such things could ever happen. It ain’t right, but it ain’t unique to President Bush.
JBP
Posted by: John Powers | April 17th, 2008 at 4:26 pm | Report this commentThe “most damaging legacy of the Bush administration” is the results of his spending on the “war” which has never been paid for or properly budgeted for. With spending on the war exceeding $3.2BN per week and tax cuts rather than tax increases to cover the additional costs, the burden on the American economy of this fiscal policy has been the steady erosion of the value of the Dollar and the increases in spending the average American family must make just to keep up with the rising real prices of goods their declining Dollar must pay for.
The second bitter pill attached to this legacy of Bush is the rising numbers of unemployed in this nation that once boasted of having nearly full employment during the previous administration. What’s this? some would ask pointing to the official unemployment rate as having remained near 4.9% for most of the Bush term in office. In all the years before Bush, unemployed was defined as being able to work full time and looking for full time employment without finding work. Since Bush came to power one additional rule was added to that definition: You also needed to qualify for and be receiving unemployment benefits or insurance payments. This had the immediate result in removing from the list of unemployed persons anybody who had been listed as unemployed before but was no longer receiving unemployment benefits which typically run out after twelve months.
Posted by: Tyler Gee | April 21st, 2008 at 5:51 am | Report this commentAs an American and war veteran, I have to say that I’d be happy to have a President who lied about the stain on his pants ANY DAY over the corrupt moral leadership this current President has shown. He has proven by his actions he is the greatest threat to the American way of life over all of its enemies past or present.