Bush Jr. & H. Hoover Related?

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Herbert Hoover's administration sat over the 1929 stock market crash brought on by unbridled capitalism and oversaw the beginning of the Great Depression. Is Bush trying to emulate a relative? After all, the Great Depression did bankrupt this country and we are moving, under the Bush administration and the republican congress, back to the good old days of unbridled capitalism and secrecy and backroom deals designed to further enrich the rich, run deficits and the national debt to the breaking point, and place the horrendous cost of all this and more on the backs of future generations.

Where are the facts?

Fact 1. The current budget deficit is 952 billion dollars. Meaning: the U.S.government is spending 952 billion dollars more than it is taking in this year. This, while granting a tax cut, a large portion of which will go to the capitalists (definition: capitalist, one who owns land, machinery, buildings or other materials which are used for the production of products for sale and profit, or one who loans money and receives a profit on that money to those own production facilities.)

Fact 2. The current U.S. debt is $6,560,734,905,844.98, [Brillig] or more than 6 and 1/2 Trillion Dollars. This is the amount the government has borrowed from its own citizens in the form of social security trust fund, Medicare trust fund, issuance of bonds (promissory notes for loans with a guaranteed interest rate) and from foreigners who invest in U.S. treasury notes or bonds, or the U.S. dollar. That is six and one half trillion dollars. Now for some basic math. Divide 6.5 trillion by 291,076,733 million people, and the answer is each man, woman and child in this country owes $22,482.27 in taxes to the government. But to be more accurate, let us take and divide the debt by the number of persons actually in the labor force. That would be the debt divided by 146,473,000 persons in the labor force (6% of whom are unemployed), which means that the actual taxpayers of this country owe $44,677.33 per person.

Fact 3. Unemployment is rising. More and more of the labor force is becoming unemployed which is increasing the tax burden owed on each person who remains in the work force. But, the real statistic is to be concerned about is the number of persons who are giving up on looking for employment. In April of 2000, the number of persons who gave up looking for a job was 331,000. In April of 2003, that number had grown to 437,000. That is 106,000 persons who looked for work and then gave up. (These numbers were obtained from the Bureau of Labor Statistics website, [BLOS].

Fact 4. In June of 2001 President Bush signed a 1.3 trillion dollar tax cut into law. A whopping $481 billion of that went to those earning 337 thousand dollars a year or more. Now another $350 billion tax cut has been signed into law. But, that $350 billion dollar is misleading. Note the following from Dennis Hastert and the Center on Budget and Policy Priorities:

The tax-cut package the President will sign into law May 28 carries an "official" cost of $350 billion through 2013, but does so only through the massive use of budget gimmicks. Every provision in the bill but one expires between the end of 2004 and the end of 2008, and most or all of these provisions are nearly certain to be extended. If the provisions are extended, the cost of the legislation through 2013 will be $807 billion to $1.06 trillion.

In addition, the bill is heavily tilted toward the upper end of the income scale, with households that make over $1 million a year receiving an average tax cut or $93,500 in 2003, while households in the middle of the income spectrum receive an average tax cut of $217. Some 36 percent of households will receive no tax cut at all; 53 percent will receive $100 or less. Because the bill provides the preponderance of its tax cuts to higher-income tax filers, a group more likely to save rather than spend its tax benefits than middle- or low-income households, the bill also is likely to be highly inefficient in boosting the economy in the near term." [Cbpp1]

"House Speaker Dennis Hastert apparently agrees with an estimate of this size. The Speaker stated on May 22: "The $350 [billion] number takes us through the next two years, basically. But also it could end up being a trillion-dollar bill, because this stuff is extendable. "Because the legislation will increase deficits and thereby add to the national debt, it also will result in increases in interest payments on the debt. Assuming the bill's provisions are extended, the bill will result in an additional $300 billion to $400 billion in interest payments on the debt through 2013, bringing the bill's total cost to between $1.1 trillion and $1.5 trillion over the coming decade." [CBPP]


In total, President Bush's tax cuts will cost the government around $2 trillion dollars. These tax cuts against a current $6.5 trillion dollar debt, spells a horrendous tax burden to fall upon our, and our children's backs in future years. They say it is a tax cut. Yes, today, it is a tax cut, but, tomorrow, with a 7.5 trillion or higher debt, it will be tax increases. This is politics, pure and simple. One hand giveth to the few, whilst the other hand taketh from the many, a little later on. Someone once called this kind of thing Voodoo Economics. They should be around today to be quoted again.

One might say, as Bush has, that this will stimulate the economy. He said that about the June, 2001 tax cut of 1.3 trillion. Now, he is saying it again about 350 billion. Is there something wrong with the logic that if the 1.6 trillion tax cut didn't rebound the economy, then the 350 billion will? Accelerated depreciation on capital purchases by small businesses was touted by the President as being a boon to Ma and Pa operations. I fail to see why a small business which is strapped now, is going to buy a $25,000.00 new piece of equipment so they can save $3000.00 on their taxes this year, not to mention hiring someone new to operate the equipment they just went into further debt to buy.

It is a simple economic fact that as the federal debt increases, interest rates go up and competition for borrowed money increases. So we are looking at a future for our children where at about the same time that interest rates are peaking, 10 to 12 years down the road, the baby boom generation will be retiring and looking for social security they paid into all their working lives, and taxes will have to go up too to cover that deficit. The environmental regulations are being relaxed more and more, and the clean up costs will create another tax increase. The Chinese economy will, about the same time, gain full stride and become the largest single competitor to the US for goods and services in the global market place taking unemployment to new heights. Let us not forget that the European Union is ironing out its wrinkles as I write this piece. The EU should be hitting full stride in about a decade as well. What kind of future does all this spell for our sons and daughters?

To me it spells the same kind of future that lay ahead of Herbert Hoover in the 1920's. He failed to heed the warning signs. Now Bush, has to be related, right?

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This page contains a single entry by David R. Remer published on May 29, 2003 5:45 PM.

Overview of American Political Landscape was the previous entry in this blog.

Honest Mistake or Hoodwinking the Public? You decide is the next entry in this blog.

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