Daily Kos :: While No One Was Looking...
Written by a self-professed former "dittohead", advisorjim lays out the budget dollars in ways that a simpleton like me can understand. Good stuff.
Do you ever find yourself wondering what's really going on while the Administration is putting on a dog and pony show? I'm pretty sure this whole Social Security `Bamboozlepalooza' tour was about distracting us from the absurd budget that the Senate narrowly passed yesterday.
One of the comedy highlights of the past 12 months was Bush's 10-year plan to halve the budget deficit. Now, remember, he created this budget deficit all by himself in 2 years. He's admitting that he's done so much damage that it'll take a decade to fix it.
That's not even the funny part. The funny part is his plan to cut the deficit in half involved not having his tax cuts made permanent, and it involved NOT privatizing social security. So as long as we band together and put a stop to Bush's fiscal irresponsibility...then Bush gets what he wants!? That doesn't feel very satisfying.
The comedy reached new heights yesterday when the Senate narrowly approved a $2.6 trillion budget for FY 2005. Just to put this in perspective, Bill Clinton's final budget $1.789 trillion, so under the "fiscal conservatism" of Bush government spending has grown by 45%. To put it another way, in terms of absolute dollars it took Clinton 8 years to increase spending as much as Bush has increased it in one year.
Last year's budget was a paltry $2.3 trillion. How did we pay for it? Well, times have been tough under Bush. For the first time in U.S. history (at least since 1900) federal revenues had declined for three straight years. That's funny! I thought tax cuts were supposed to magically increase federal revenue. There's another great theory shot to hell in the crucible of reality.
So after passing around the collection plate in `ought-four' we only had $1.880 trillion. No biggie. We just need to borrow some. We started by borrowing from old people (the $151.1 billion Social Security surplus for the year), and then we borrowed the rest from our rich Chinese uncle.
What's that you say? Reagan proved deficits don't matter? Well, no and no. Reagan proved you can borrow money and it won't kill you, but Reagan didn't sell the country to just anybody. In his last year in office total Federal Debt was $2.6 trillion, and all but $500 billion of it was publicly held. Last year total Federal Debt was $7.4 trillion with only $4.2 trillion of it publicly held. To summarize: Foreign ownership of U.S. debt under Reagan-19%. Foreign ownership of U.S. debt under Bush: 44% and rising. It is likely that by the time Bush leaves office a majority of our debt will be held by foreign governments. Call me crazy, but I've always kind of wanted to own my own country. I guess that's more of a `Blue State' value.
Here's what we're looking at for 2005. We've got a $2.6 trillion budget. Last year we collected $1.880 trillion in revenue, and economically this year looks like it's going to be about as crappy as last year. So we can expect about the same level of revenue, right? Well...we WOULD have...but somehow congress saw fit to include another $100 billion in tax cuts to this budget bill. That makes sense. If you can't afford to pay your mortgage, one of the first things you want to do is march into your boss's office and demand a pay cut, right?
Nixon's treasury secretary, William Simon, best summarizes my thoughts on the subject. Admittedly Mr. Simon was talking about the labyrinthine tax code of the 1970s, but I think it applies equally well to this year's budget. "It should look like someone designed it on purpose."
I've copied the whole damn thing here because I feel it is important to try to grasp just what is happening with the nation's financial health. Most people (including me) can't understand just what is going down and the dangers that lie ahead. From my mathematically-challenged perspective it looks like we could bankrupt the whole system if we continue on this path.