Janet's Conner

This Blog tell the Truth and will never not tell the Truth. Impeach Bush

Sunday, August 06, 2006

NO FREE LUNCH BECAUSE OF BUSH'S TAX CUTS

With the enactment in May of a $70B tax cut on the heels of the tax cuts approved in every year since 2001 and the current effort to reduce the estate tax, one very important matter has received almost no public attention or debate.

Simply stated, it amounts to this: THERE IS NO FREE LUCH

Penn Live
The Patriot News
August 6, 2006


The conventional wisdom is that the government is merely taking less of our money. In fact, the government is paying for the tax cuts by borrowing money. Even tax analysts in the Bush Treasury Department and the Republican-run Senate Budget Committee say the tax cuts have to be accounted for, either in the form of higher taxes, draconian spending cuts or a combination of both. No one in the Treasury Department or on the Budget Committee believes, as many Americans apparently do, that the nation can grow itself out of the deficit hole.

How much money are we talking about here? In March, the Center for Budget and Policy Priorities (BCPP) released a study that found that if all of the tax cuts were in effect this year, the amount would equal the combined budgets of the departments of Education, Veterans Affairs, Homeland Security, State, Energy, and Housing and Urban Development, plus the Environmental Protection Agency.

The Budget Committee, in approving by a party-line vote what is described as a "vision statement," would set an annual deficit target of 0.5 percent of the Gross Domestic Product for 2012 and afterward. So, without even coming close to a balanced budget, the legislation---which is not expected to be approved this year---would trigger automatic cuts in the entitlement programs, such as Medicare and veterans' benefits, to the depth required to achieve the target. Entitlement programs other than Social Security would face cuts averaging 15.6 percent to hit the target in 2012, according to the analysis by CBPP. THIS IS ON TOP OF CUTS THAT WOULD BE MANDATED IN DISCRETIONARY PROGRAMS.

Over the 10-year period from 2007-2016, the Senate plan would require $1.6 trillion worth of cuts in entitlement cuts. However, if the current tax cuts are not extended or are offset by raising other taxes, the Senate bill would require only $80B in cuts, taking care of 95% of the revenue shortfall.

To put the matter in even more dramatic perspective, CBPP estimates that if the tax cuts were made permanent, they would amount to three times the projected shortfall of Social Security over the next 75 years.

The tax cuts were originally offered as an antidote to the brief recession experienced in 2001. Sound fiscal policy would have used the current strong economy to restore the government's financial health and end its overreliance on deficit spending. Not to do so is going to limit the governement's ability to respond in like fashion to the next recession, something that is all too likely if oil prices keep going higher.

The country is squandering an opportunity to put its financial house in order, reflecting a short-sighted live-now, the heck-with-the-future mentality. Eventually, however, there will be an accounting for today's borrow-and-spend policies.

UNFORTUNATELY, FEW, IF ANY, OF THE PERPETRATORS WILL BE AROUND TO BE HELD RESPONSIBLE FOR THEIR MISMANAGEMENT OF THE PUBLIC PURSE.

***And all of this was courtesy of the REPUBLICAN White House and Congress! This is why the Republicans need to be voted "OUT" this election season!!!!! Maybe then they can be held responsible!

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