bush squibbs us economic policy...

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    Bush is really a menace to his own people as much as he is to the rest of the world...


    The article below (from the current issue of Fortune magazine), is a bit of a shocker. Article by Peronet Despiegnes.
    ...................................................................

    President Bush served notice shortly after his big election win last
    year that he'd do whatever it took to bring the D.C. establishment to
    heel and radically remake Social Security, the tax code, and the
    federal budget deficit. Drawing on the legacy of President Ronald
    Reagan, who made sweeping and unpopular policy decisions, Bush
    insisted, "I earned capital in the campaign, political capital, and now
    I intend to spend it."

    But his first-term record and early second-term signals suggest Bush
    will be unwilling to force painful, epic changes. While he's widely
    portrayed as ready to make the tough calls on foreign policy, on the
    domestic front his first-term record shows a pattern of shying away
    from inflicting pain on any major segment of the electorate, even when
    it's for the greater, long-term economic good. On trade, the White
    House talked liberalization while imposing tariffs and quotas; on the
    deficit, Bush offered tax-cut goodies for everyone while signing off on
    the biggest surge in government spending in more than 20 years; when it
    came to shoring up Medicare, he backed a prescription-drug benefit that
    adds at least another $8 trillion to the program's $20 trillion future
    liability.

    Will Bush's second term be any different? There are early signs the
    White House is already retreating from its bold pronouncements.
    Remember those promises to get tough on the deficit? Just last month
    Bush signed a massive spending bill including another $15 billion in
    pork. Lately the administration has been suggesting it will use its
    initial 2004 deficit forecast of $521 billion, rather than the actual
    2004 deficit of $413 billion, as a starting point for measuring its
    progress toward halving the deficit—in effect lowering the bar. And it
    looks as if the White House's upcoming 2006 budget proposal will err on
    the side of optimism and project a large jump in tax revenue
    (admittedly other Presidents have used this trick) while excluding
    costs for Iraq and a Social Security overhaul. Presto! Deficit
    halved—on paper, at least.

    On tax reform, the White House said it would radically simplify an
    economically damaging system riddled with loopholes. But shortly before
    the election Bush signed a big corporate tax bill stuffed with new
    breaks, and after the election he suggested some of the biggest breaks
    should stay, including deductions for mortgage interest. Meanwhile
    administration officials hint they'll push for incremental rather than
    radical change, and may delay any significant reform effort to 2006.
    Hardly Reaganesque (the 1986 tax reform act slashed loopholes and
    sharply reduced the number and levels of all tax brackets, dramatically
    simplifying the code).

    On Social Security, while Bush talked about eliminating the $11
    trillion hole facing the program, his emphasis since the election has
    been on adding new private savings accounts and borrowing bigtime to
    pay for them. Even White House officials admit in a leaked memo that
    that doesn't solve the problem. Bush has ruled out payroll tax
    increases but hasn't made a peep about concrete ideas to reduce benefit
    payouts, such as raising the retirement age.

    To believe the White House will push hard for economic reform, "you
    have to believe that there will be a big cultural change within the
    White House, and that the President will put down more political
    capital than he's ever been willing to risk as governor or as
    President," says Lehman Brothers public policy analyst Kim Wallace. If
    Bush were serious about deficit cutting, tax simplification, and Social
    Security reform—and investors believed it—shares in tax preparers would
    be tanking faster than Britney Spears's career, and Treasury bond
    prices would soar on long-term bets that future deficits would shrink,
    making bonds more scarce than expected. For the most part that's not
    happening. Until it does, we're still awaiting Reagan's real successor.



 
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