Sunday, September 13, 2015

Fuzzy Math II

Back in 2000, our country's financial picture was about as good as it could get. The budget was in surplus, unemployment was low, and the national debt was on pace to be paid off entirely by 2013. Al Gore and George W. Bush had very different ideas about what to do with this good fortune. Gore wanted to protect the surplus, reserve money for Social Security and continue paying down the national debt. Bush claimed the American people were entitled to a "refund" and called for massive tax cuts. Gore was mocked as a green-eye-shade fiscal scold and ridiculed for his idea to segregate the Social Security surplus in a "lockbox" that would no longer be tapped to pay for regular government business. Bush was largely given a pass by the media and those that raised a tepid concern were tsk tsked as engaging in "fuzzy math." 

Bush's tax cuts, along with two wars and a prescription drug benefit were all put on the government's credit card, increasing both the debt and annual budget deficit while the economic collapse in 2008 exploded both to levels never seen before. It has taken all of President Obama's time in office to bring the deficit under control, but the debt continues to increase because the interest on it accumulates faster than we can pay it down and the budget is still in deficit, requiring us to continue borrowing, just at a lower amount. 

Once Republicans took over the House of Representatives in 2011, the term "offset" came into vogue. The idea behind the offset is that any new spending, no matter how insignificant, should be "offset" by a cut somewhere else in the budget so as not to increase either the deficit or debt. Of course, this is laughable coming from a party that spent trillions on tax cuts and wars while their own man was in the White House, but even small bore initiatives that most people agree would provide a significant return on investment - things like infrastructure spending, universal pre-kindergarten, and two years of free community college - go nowhere.

So it is interesting to see how little coverage Jeb Bus's tax policy, announced last week, has garnered. Here is a plan that by his own economist's admission would add $1.2 trillion over 10 years and, is estimated by economist's not being paid by the Bush campaign to cost $3.4 trillion over ten years. Unsurprisingly, the vast majority of those benefits will accrue to the wealthiest Americans while offering crumbs for the rest of us. If this all sounds familiar, it should. This was tried in 1981 under Ronald Reagan and again in 2001 and 2003 by George W. Bush. It did not work either time. And not only did it not work, but each time, our deficit and debt soared.

You would think this type of fiscal irresponsibility would cause howls from the deficit reduction crowd on Capitol Hill. That the Republicans who think a $66 billion investment over 10 years (that's $6.6 billion a year, or less than what was spent in one month in Iraq) so every child can attend pre-kindergarten and $60 billion over 10 years so all young people could attend two years of community college free of charge are just a profligate waste of money are silent about a tax cut plan that would add trillions to our debt. In fact, even using Bush's economist's own numbers, we could pay for 100 years of pre-k and community college for the ten year cost of Bush's giveaway to the richest Americans who already own so much of our nation's wealth.

While there has been some media coverage along the margins, like many things in politics, the problem is in the proportionality of that coverage. Sure, some dork at did a deep dive to discover, spoiler alert, that the rich would make out really well under Bush's plan, but the Beltway media is hurtling itself at Bush's feet because he wants to eliminate the so-called "carried interest" loophole without mentioning that would only generate $1.8 billion a year, or less than 1% of the yearly cost of his overall plan. 

Unfortunately, we have seen this movie before. The media, which claims it wants substantive policy discussion, will totally ignore the Bush tax plan (it received no coverage on the Sunday talk shows and what coverage it may get in the next few days will pale in comparison to anything Donald Trump tweets or the results of the latest poll) and, in the increasingly unlikely event Bush gets the nomination, will devolve into a "one side claims this, the other side claims that" neutrality that will ignore the reality of prior experiments in massive tax cuts for the wealthy. If the old axiom is "fool me once, shame on you, fool me twice, shame on me," who do we blame if we are fooled a third time?

Follow me on Twitter - @scarylawyerguy

No comments:

Post a Comment