Here we go again. The Congressional Budget Office is predicting that the federal government will run big budget deficits through 2005, a staggering total of $452 billion, and that's without the big increases in military spending and additional tax cuts proposed by the Bush administration.
For those of you keeping score at home, the Bush administration inherited a budget surplus (2 TRILLION DOLLARS) and a booming economy, and has taken less than two years to run it into a hole. How did the resident do it? With massive tax giveaways to rich friends and supporters, $1.35 trillion over 10 years.
Of course, the collapse of the stock market has caused the biggest drop in federal tax collections since 1946, not to mention the pain of lost jobs and vanished retirement savings. The terrorist attacks of September 11 plunged the nation into a new war in which the only certainty is that it will cost us. Though these events could not be anticipated, it could be anticipated that something would happen to end the gravy train -- something always does. USUALLY A REPUBLICAN STEALING MONEY. And nothing that has happened has shaken Mr. Bush's conviction that keeping rich folks happy is more important than maintaining a balanced budget.
Once we start down this path of deficit spending, it'll be extremely difficult to reverse. The predictions that the government will be back in the black after only four years are hopelessly optimistic.
CBO Director Dan Crippen says this deficit pales by comparison to that run up during the administration of Ronald Reagan. In 1983, the government ran a deficit equal to 6 percent of the nation's gross domestic product; this year the deficit will amount to only 1.5 percent of GDP. But just give it time. Once Mr. Bush gets his war, he'll have to borrow to sustain it. Increased government borrowing leads to interest rate hikes. Mortgage rates will rise and housing prices will fall, choking the only growing sector of the economy. Business investment will decline. Inflation will force the Federal Reserve to raise rates even higher. And it'll be 1990 all over again.
The irony is the Republicans used to be the party of fiscal restraint, a role they are still pretending to play. "The president believes the lesson from today's CBO numbers is that Congress needs to hold the line on spending," said spokesman Ari Fleischer. Congress' failure is in not holding the line on Mr. Bush, who is cooking the country's goose by coupling a mammoth tax cut with increased military spending. The last time we ran up the deficit for a military buildup, it took a recession and 10 years of fiscal discipline to pull us out.
President Clinton showed us that deficit spending was not necessary for a thriving economy, that if the debt were paid off, the economy would thrive, more people would have jobs and the stock market would go up. Mr. Bush is undoing all that good work to benefit the top one percent of households, and committing political suicide in the process. Let's hope someone -- a Democratic Congress in 2003? -- can stop him before he takes us all down with him.