BCT Editorial – 1/3/06

This page was last updated on January 4, 2006.

No sense of shame; Editorial; Beaver County Times; January 3, 2005.

The editorial title also describes the Times.

Please don’t interpret my comments below as supporting the current level of government spending. I do not. There is absolutely no question we spend far too much, and the vast majority of it is on socialist programs the government has no business funding with our hard-earned income.

I would also caution you not to buy into the editorial’s crocodile tears about debt, spending, et cetera and the impact on “future generations.”

Below is a detailed critique of the subject editorial.

“Bush administration will pile more debt on future generations

“It’s bad enough that the Bush administration is requesting that Congress raise the nation’s $8.18 trillion debt ceiling early next year.

“But Treasury Secretary John Snow really crossed the line when he claimed the Bush White House was doing a better job of fighting red ink than the Clinton administration did.

“Bloomberg News reported Snow said Clinton’s last budget was a ‘mirage’ and ‘wasn’t a real surplus.’ He claimed it was inflated by a stock-market price bubble that resulted in more revenue from capital gains in the last years of the Clinton administration.

“Such a bubble did exist. But one difference between then and now is that the money that was pouring in back then wasn’t wasted on spending or tax-cut sprees. Instead of blowing the revenue bonanza, the surplus funds were used to pay down the national debt. Of course, the reason that happened was because the two sides couldn’t agree on how to spend the money or whether to cut taxes.”

[RWC] Not exactly. As you will read below, peak spending, as a percent of GDP, during the Clinton administration (21%) exceeded the peak of the Bush administration (20.3%).

“That stalemate proved to be beneficial because the money that was left over had to be used to pay down a little of the crushing debt that is being piled on future generations of Americans.

“The reason the debt ceiling must be raised is because of the Bush administration’s budget-killing combo of tax cuts and spending profligacy. At a time when it was cutting the federal government’s revenue sources and fighting a war, it also was spending money as if there was no tomorrow.”

[RWC] Once again the Times displays either economic ignorance or simple partisanship. As we know, President Bush inherited a recession from the Clinton administration. Then 9/11 added fuel to the fire. Even if there had been no tax cuts, tax revenue was dropping as a result of a slowing economy.

The only proven cure for a recession is to cut taxes. Likewise, tax increases worsen recessions. We also know from experience that decreasing marginal tax rates actually increases tax revenue once the tax cuts take effect and the economy rebounds. This was demonstrated once again this year when the deficit was revised downward as a result of “higher than expected tax revenue.” In truth, there was nothing unexpected about increasing tax revenue.

You’ll note the editorial didn’t tell us what programs should have been cut to balance the budget. I think we know why.

“Bloomberg News reported that since Washington became a one-party town, discretionary spending rose from $649.3 billion in 2001 to $895 billion in 2004, an increase of $245.7 billion. As a result of that, discretionary spending also increased as a share of the economy from 6.5 percent in 2001 to 7.7 percent in 2004.”

[RWC] The editorial author did some data “cherry picking.” If the author had taken the time to do a little research, he would have learned total spending during the Bush years has ranged from 19.4% of GDP to 20.3%. During the Clinton years, spending ranged from 18.4% of GDP to 21%. The average for the Bush years has been 19.85% vs. Clinton’s 19.55%.

“Because of the profligate ways of the big-government Republicans who control the federal government, a debt of $8.18 trillion is not enough. They need a higher one - Snow didn’t indicate how high - to continue their borrow-and-spend ways.”

[RWC] There’s no question that elected Republicans as a group really are “big-government Republicans,” a.k.a. Rockefeller Republicans. In this case, the only difference between these Republicans and the Times is that the Republicans at least understand tax cuts help the economy. I could be wrong, but I doubt we’d see this editorial if a liberal were in the White House.

“They’ll get it because failure to do so would, as The Associated Press reported, would ‘rattle bond markets, force interest rates higher and shake the economy.’

“Unfortunately, that debt is not a mirage. Our fiscal irresponsibility should shame us, but it doesn’t. We are stealing the future from generations of Americans to come and, quite frankly, my dears, we don’t give a damn.”

[RWC] At last some truth. The Times finally admits the logical conclusion of its economic and political positions.