Why Bush Can’T Be Trusted To Save America’S Financial Institutions

If the Bush boys could be completely trusted to build a strong economy, we wouldn’t have suffered this economic meltdown in the first place. Why Bush Can’t Be Trusted To Save America’s Financial InstitutionsBy Cliff Montgomery – Sept. 25th, 2008The $700 billion Wall Street bailout plan being forced onto average Main Street taxpayers–and for which Bush Treasury Secretary Henry Paulson is demanding “full authority”–forces us at to make a reasonable observation: If the Bush boys could be completely trusted to build a strong economy, we wouldn’t have suffered this economic meltdown in the first place.OMB Watch, a “government transparency and accountability” group, has correctly pointed out that the Bush Administration already “has manufactured a fiscal crisis with massive tax cuts, mainly targeted to the wealthy, that has resulted in federal revenues being reduced to the lowest levels since the 1950s as a percentage of our economy.”Cutting revenue to that level means there is drastically less money to fund programs that address community and human need problems,” adds OMB Watch.The Center on Budget and Policy Priorities (CBPP), a liberal think-tank, echoed those findings with a recent eye-opening audit that reveals the Bush Administration’s inability to maintain a decent federal budget or provide for wise governmental investment.And if Bush officials cannot provide a reasonable budget with the federal checkbook, there’s no way they alone can provide a winning formula to save America’s largest financial institutions.  Those who wish to read the entire CBPP study may download it here. Below we offer these telling quotes from the report:“The federal budget is projected to run a $546 billion deficit in 2009, compared with the $710 billion surplus that budget experts projected for 2009 back when President Bush took office nearly eight years ago. This $1.3 trillion deterioration in the nation’s fiscal finances for 2009 can be seen by comparing estimates that the Congressional Budget Office (CBO) released this week with those that CBO released in January 2001.”The story is much the same for the entire ten-year period covered by CBO’s 2001 projection. In January 2001, CBO projected a cumulative $5.6 trillion surplus for 2002-2011. Now, CBO’s new report suggests the nation will amass a cumulative deficit of $3.8 trillion over that same period, marking a $9.4 trillion deterioration.”For both 2009 and the ten-year period, this massive deterioration is partly due to weaker-than expected performance of the economy, along with other ‘technical’ factors that are beyond policymakers’ control. But these economic and technical factors account for less than one-fourth of the fiscal deterioration for each period, and they are not responsible for the return of deficits.”Even given the disappointing performance of the economy since 2001 relative to CBO’s earlier projections, there would have been large surpluses in every year–totaling $3.4 trillion over the 2002-2011 period–if policymakers had enacted no tax cuts or program increases since 2001.”The dominant factor in the unprecedented fiscal deterioration thus was not the performance of the economy. Nor was it increases in domestic programs. The key factors have been large tax cuts and increases in security-related programs. For fiscal 2009, some $1 trillion of the $1.3 trillion deterioration in the nation’s fiscal finances stems from policy actions, and tax cuts account for 42 percent of this $1 trillion deterioration. Increases in military and other security programs account for another 40 percent of the deterioration.”The story is much the same for the ten-year period as a whole. For the 2002-2011 period, tax cuts and increases in security programs account for more than four-fifths of the fiscal deterioration caused by policy actions. Increases in domestic programs played a much more modest role.”Tax cuts and defense/security increases account for 83 percent of the budget deterioration over the 2002-2011 period that is attributable to legislation enacted since January 2001. Domestic spending increases account for 17 percent.”In sum, tax cuts, increased defense and security funding, and a dose of economic cold water are, in order, the three key reasons that the large surpluses projected in January 2001 turned into substantial deficits. Increases in domestic programs have been relatively modest in comparison.”Like what you’re reading so far? Then why not order a full year (52 issues) of thee-newsletter for only $15? A major article covering an story not being told in the Corporate Press will be delivered to your email every Monday morning for a full year, for less than 30 cents an issue. Order Now!