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Sunday, October 02, 2005

Pork Belly Futures

The Bush administration was handed a surplus and quickly set about to give "our money back." That was the rational for the first tax cut. Quickly the rational changed to "stimulate the economy." Now there are proposals to eliminate the Estate Tax to help the victims of Katrina. All these explanations change as often as the shifting rational for the war in Iraq.

The nation's finances are screwed by the profligate spending of the party that controls almost 3 out 3 arms of government.

The WaPo asks Whose Fault is Pork?:
Who should be held responsible for runaway government spending? Mr. DeLay is certainly a good place to start. His governing principle was not to stand on principle but rather to rain taxpayers' money on every lobby that could return the favor with campaign contributions. But the biggest responsibility lies not with any member of the legislature but with Mr. Bush. Unlike senators and House members, the president represents the whole nation; he is supposed to defend the general interest against particularist claims. Moreover, he has the power to do so. If Congress serves up wasteful bills, the president can veto them.

Mr. Bush has been too cowardly to do that. He is the first president since John Quincy Adams to have served a full term without once exercising his veto, and his second term has so far been no different. This summer Mr. Bush promised to veto the transportation bill if it cost more than $256 billion. His threat brought the bill's size down quite a bit, but in the end he caved and signed a package that cost $295 billion. Why did he blink? Doesn't his administration pride itself on defending the power and prerogatives of the presidency? Mr. Bush's father had the courage to veto 44 bills in four years, and President Ronald Reagan once vetoed a transportation bill because it contained about 150 pork projects. But the bill that Mr. Bush just signed contained at least 6,000 pork projects.

The president's defenders plead that it's hard to veto bills when his own party controls Congress. But as the conservative commentator Bruce Bartlett points out, this defense is nonsense. President Franklin D. Roosevelt held office at a time of huge Democratic Party majorities in Congress, but that didn't stop him from vetoing a record 635 bills. Presidents John F. Kennedy, Lyndon B. Johnson and Jimmy Carter also coexisted with large Democratic majorities, yet Kennedy vetoed 21 bills during his short presidency, Johnson vetoed 30 and Carter vetoed 31.

Apart from the economic idiocy that is supply-side economics, the wealthiest of those who received tax breaks did not plow it back into the economy by purchasing durable goods - they bought T-Bills instead. The stock market is not the only engine of the economy rather consumer demand stimulates growth.

So who benefits from a large deficit? Anyone who owes on their credit card can answer that one. Each year of this administration more and more of your tax dollars goes to servicing the debt. In effect this is a transfer of wealth to those that hold our debt; bankers take their cut.

However, increasingly our deficit is propped up by foreign banks. Our cash is going abroad at an ever faster rate. This is not good for our trade deficits as dollars become cheaper to come by. At times I get the paranoid thought that Bush will try and start a war with China to seize their assets, i.e. our debt. But then I feel comforted that WalMart has got our back...cough, cough.

(via Atrios)