Which Direction is the US Heading?
The economic program of President Bush benefits the rich and expands the gigantic debt burden of the US
By Norbert Rost
[This article originally published January 9, 2003 in the cyber journal Telepolis is translated from the German on the World Wide Web, http://www.heise.de/tp/deutsch/inhalt/mein/13921/1.html
The president of the United States of America, G.W. Bush, launches a much greater and more daring economic program than undertaken in the past. The cost is $674 billion spread over the next 10 years. The effect of the economic program is certainly controversial.
Critics like the Citizens for Tax Justice reproach the US president for giving tax gifts mainly to the super-rich: “68% of the tax relief goes to the top 1% of taxpayers with an average income of $1.1 million a year. They will save $16,000.” For non-economists, it is obvious that income millionaires have much less reason to spend this extra-money than for example households keeping their heads above water with several jobs. Thus a stimulation of the economy on account of this economic program (that also especially supports married couples with children) is at least questionable.
Why no one seriously asks about the origin of the money is even worse. The FTD reported at the end of October of the gigantic budget deficit of the US. The huge debt mountain amassed by the greatest economic power of the world amounts to almost $6000 billion, more than $20,000 for every US citizen at the beginning of 2001. When president Bush began his term of office, the Congressional Budget Office still forecast a budget surplus of over $3 trillion.
That was before the first tax cuts and the war against terrorism. In the armament-rich 2002, $158 billion was given to these projects. The tax gifts of the planned economic program make the hole greater, not smaller. On January 6, 2003, the debt condition of the US amounted to $6,383,514,236,076.15.
The US economic system has tottered despite much positive news. However the economic journalists prefer hoping for new soaring flights of the stock market than scrutinizing situations. A tottering economy, tax reduction programs and more military spending (weapons, secret services, war) hardly bring new money into the treasuries.
We must either accept great and increasing budget deficits or draconian cuts in national programs not connected to homeland security. This is the implication.
Robert D. Reischauer, president of the Urban Institute and former director of the Congressional Budget Office
The US doesn’t have many possibilities for collecting revenue. First, there are the money printing machines. Driving inflation makes sense from a US perspective since firms and private persons are hopelessly over-indebted, not only the state. For debtors, this means they can pay off their debts more quickly. Everyone recalling the stories of laundry baskets full of money knows what inflation can inflict.
Since the US economy and its money economy have massive influence on the rest of the world thanks to globalization, non-American journalists should
ask in the interest of the people whom they inform: Quo vadis, USA.