Friday, May 9, 2008

It is the economy again.

Many Hillary Clinton supporters are thinking of going over to McCain in the general if she does not get the nomination.  Many argue that McCain is somehow an acceptable alternative to HRC.  Let’s examine that idea as it applies to one of the signature issues of the 2008 election – the economy. 

First off McCain is now on record of wanting to make the Bush tax cuts permanent.  At one time McCain was dead set against such a move.  At one time McCain voted against those cuts.  Now not only does he support those cuts, he argues for further cuts for big business.  Please remember that we have never before cut taxes in time of war. 

Under Bush we have nearly doubled our national debt.  The debt now stands at a staggering 9.3 Trillion dollars.  If you really want to know why oil is now $126 a barrel and why gas is near $4.00 that is one of the reasons.  Our debt is also the reason the Euro now trades at $1.52.  The once mighty dollar trading at 103 yen a slight improve from the low of 97 yen to one U.S. Dollar but still rather pitiful.  The dollar is weak because spendthrift George is printing money at an alarming rate.  The US dollar is not quite as bad as the Zimbabwe currency, also named the dollar, but the fundamental weakness of both currencies is the reckless printing of new money.  There are too many dollars chasing too few goods. 

Instead of rectifying the situation by raising revenues, or cutting spending McCain claims he will cut pork.  Small problem, as egregious as ear marks and other corrupt practices are, they are still a small amount of federal expenditures.  Any serious trimming would have to come from the military budget.  The bill for Iraq so far is five hundred and eighteen million dollars and climbing.  The real cost of the war is now estimated to be three trillion dollars.  On top of the war there is the whole military machine that we invest in of nearly 600 billion dollars.  Our Defense budget matches the combined budget of the rest of the world.  Our nearest competitor China spends at best one fifth of that amount.  Any serious discussion of cutting the U.S. budget has got to start with cutting defense outlays.  Seeing as Senator “there will be other wars” is a rabid supporter future military misadventures cutting Defense outlays does not seem to be in the cards.

If you are thinking we could just cut other “wasteful” outlays think again.  Take a look at that favorite target of Conservatives Health and Human Services.  Only approximately 70 billion dollars of its budget is discretionary.  The rest of the money is locked up in programs like Medicare and Medicaid. The entire Justice Department runs on a budget of about 22.7 Billion dollars, the Agriculture Department gets by on 95 Billion.  Once mandatory spending is factored out, there is not that much wiggle room in either of the two departments. 

Since Regan’s elevation to the oval office there has only been one president who was a true deficit hawk.  There was only one president who cut spending and raised taxes significantly.  There has been only one president who came close to balancing the budget; William Jefferson Clinton.  After eight years of careful stewardship he turned the keys of the government to the Republicans who straight away drove the government’s finances into a ditch.  The Republicans took Clintons surplus and handed it over to the top ½ of 1% of the economic scale.  Millionaires and Billionaires made out like bandits while the nation slid deeper into debt.

Thanks to George W Bush we are now going to revisit the economy of the 1970’s.  Enormous public debt will start to drive up inflation.  Poor income distribution will drive down wages and employment.  While jobs stagnate and real growth sputters or goes backwards, prices will continue to rise.  John McCain’s non solution of even more tax cuts for the wealthy will only make matters worse.  John McCain’s eagerness for further military spending- read more war will further damaged economic fundamentals.  It was LBJ’s refusal to pay for Vietnam that caused the economy of the 1970’s to go sideways; it took a decade to work out the inflationary policies of LBJ.  The fall out from Iraq will be several magnitudes worse.  We have borrowed much more money to support the Iraq conflict and have not gotten serious about paying for it.  Forget about passing the cost of to our children and grandchildren; McCain is proposing we borrow even more money and passing it on to the great-grandchildren and great-great grandchildren.

Any proposal of tax cuts in such an environment is shear lunacy.  It is pandering to the right wing base of the Republican Party and rewarding the financial fat cats who fund both the party and the tax-cut ideologues.  A tax cut now is the height of irresponsibility; it is a proposal to wreck the government and pauperize the citizenry.  That is what McCain is proposing.  He is proposing even more supply-side, trickle-down nonsense.  There is nothing there for working class people; there is no solution to downturn in median income suffered in the Bush years.  There is no industrial policy.  There is just the insane proposition that the market will solve all ills.   20 years of Laffer curve orthodoxy have utterly failed to pan out; but John McCain is proposing we have another go at it.  People, you can not be serious about giving Jonny boy the opportunity.  One more time; a McCain presidency would be an utter disaster for the USA.  We literally can not afford the man getting in the oval office.
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