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Admiral
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of the peace and coexistance movement
Feb 2001
time: 00:25
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quote:
Bush's Class-War Budget
By PAUL KRUGMAN
It may sound shrill to describe President Bush as someone who takes food from the mouths of babes and gives the proceeds to his millionaire friends. Yet his latest budget proposal is top-down class warfare in action. And it offers the Democrats an opportunity, if they're willing to take it.
First, the facts: the budget proposal really does take food from the mouths of babes. One of the proposed spending cuts would make it harder for working families with children to receive food stamps, terminating aid for about 300,000 people. Another would deny child care assistance to about 300,000 children, again in low-income working families.
And the budget really does shower largesse on millionaires even as it punishes the needy. For example, the Center on Budget and Policy Priorities informs us that even as the administration demands spending cuts, it will proceed with the phaseout of two little-known tax provisions - originally put in place under the first President George Bush - that limit deductions and exemptions for high-income households.
More than half of the benefits from this backdoor tax cut would go to people with incomes of more than a million dollars; 97 percent would go to people with incomes exceeding $200,000.
It so happens that the number of taxpayers with more than $1 million in annual income is about the same as the number of people who would have their food stamps cut off under the Bush proposal. But it costs a lot more to give a millionaire a break than to put food on a low-income family's table: eliminating limits on deductions and exemptions would give taxpayers with incomes over $1 million an average tax cut of more than $19,000.
It's like that all the way through. On one side, the budget calls for program cuts that are small change compared with the budget deficit, yet will harm hundreds of thousands of the most vulnerable Americans. On the other side, it calls for making tax cuts for the wealthy permanent, and for new tax breaks for the affluent in the form of tax-sheltered accounts and more liberal rules for deductions.
The question is whether the relentless mean-spiritedness of this budget finally awakens the public to the true cost of Mr. Bush's tax policy.
Until now, the administration has been able to get away with the pretense that it can offset the revenue loss from tax cuts with benign spending restraint. That's because until now, "restraint" was an abstract concept, not tied to specific actions, making it seem as if spending cuts would hurt only a few special interest groups.
But here we are with the first demonstration of restraint in action, and look what's on the chopping block, selected for big cuts: the Centers for Disease Control and Prevention, health insurance for children and aid to law enforcement. (Yes, Mr. Bush proposes to cut farm subsidies, which are truly wasteful. Let's see how much political capital he spends on that proposal.)
Until now, the administration has also been able to pretend that the budget deficit isn't an important issue so the role of tax cuts in causing that deficit can be ignored. But Mr. Bush has at last conceded that the deficit is indeed a major problem.
Why shouldn't the affluent, who have done so well from Mr. Bush's policies, pay part of the price of dealing with that problem?
Here's a comparison: the Bush budget proposal would cut domestic discretionary spending, adjusted for inflation, by 16 percent over the next five years. That would mean savage cuts in education, health care, veterans' benefits and environmental protection. Yet these cuts would save only about $66 billion per year, about one-sixth of the budget deficit.
On the other side, a rollback of Mr. Bush's cuts in tax rates for high-income brackets, on capital gains and on dividend income would yield more than $120 billion per year in extra revenue - eliminating almost a third of the budget deficit - yet have hardly any effect on middle-income families. (Estimates from the Tax Policy Center of the Urban Institute and the Brookings Institution show that such a rollback would cost families with incomes between $25,000 and $80,000 an average of $156.)
Why, then, shouldn't a rollback of high-end tax cuts be on the table?
Democrats have surprised the Bush administration, and themselves, by effectively pushing back against Mr. Bush's attempt to dismantle Social Security. It's time for them to broaden their opposition, and push back against Mr. Bush's tax policy. |
Feel free to comment, as long as it isn't a snide remark about Krugman's past (has no bearing on the article. Otherwise, i'd have no objection).
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Zulu Elephant
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quote:
Originally posted by GePap
The bottom line is that the market by itself does nothing to "help" people. That is not the point of the market. So if we want to help the poor, it won't be a "market solution", because such a thing for poverty does not exist. |
Reminds me of this quote from the insanely funny book "Things can only get better" by John O'Farrell about his time as Labour supporter in the 1980s (when Labour were left wing loonies in the wilderness)
quote:
I remembered a political argument I had during the election campaign with a Conservative friend of my parents. He had said to me: "The reason I am voting Conservative is because I do not believe in interfering with in the marketplace. You have to allow the market to decide everything."
To which I said: "Sorry, who is this 'Market' bloke? Who elected him then? Listen, the market is something we have created for our own purposes, not some law of physics as unchangeable as the bbing of the tides or the waning of the moon. When you Conservatives say that you cannot interfere with the market what you really mean is you cannot interfere with me - with my desire to make as much money as I can, at the expense of everyone else. The market is our servant, something we have created - if it is causing poverty and destitution then we must interfere to stop it doing these things."
Or was this the reply that I came up with that night in bed, reconstructing the argument in my head? Yes, that's right...my actual reply to his point had been, "Oh, that's just Tory rubbish" |
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11-02-2005 13:15
I thought he was just an econ-prof turned columnist.
Ehhhxellent! The PLATO project is beginning to bear results.
You forgot a well educated/well trained workforce and consumers with 
to spend.
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