When they had them, Republicans and Democrats alike were anxious to tell you what great things they had accomplished, but no one told you where the surpluses came from. That was a big secret.
Today, when the optimist club is telling you for the umpteenth time that the economy is on the rebound despite high unemployment, perhaps it’s time to revisit a few facts from the days of the government’s greatest surplus, fiscal 2000, when the tax-and-spend democrats were in charge.
If you will remember, the surplus in fiscal 2000 was a whopping $237 billion. Here’s where it came from:
In January, 2001, the Congressional Budget Office (CBO) delivered “testimony” to the effect that the $87 billion surplus would grow to something like an accumulated surplus of almost $2 trillion over the next decade. At the time, President Bush was about to propose a $1.4 trillion income tax cut.
It’s this income tax surplus that George W. Bush addressed with his tax cut, as well he should have. There is no reason for the federal government to have a surplus unless it’s to pay down the national debt.
Every taxpayer received at least a $300 rebate and the brackets were lowered. Now the President wants to make these income tax cuts permanent. Of course, it also brings up the old story of the wealthy paying most of the taxes on income and that something like 80 percent of the tax is paid by less than 10 percent of the taxpayers; i.e., the rich pay more income taxes and therefore should get the largest tax breaks.
Let’s examine the entitlement’s $150 billion share of this 2000 surplus:
In fiscal 2000, entitlements accounted for 63 percent, two thirds, of the surplus. And they are still producing surpluses. Since there is no income tax surplus today, entitlements are producing all, 100 percent, of the surplus you are not being told about.
Surpluses have not “disappeared” as so many of the spin doctor propagandists want you to believe. Since 1983, when payroll taxes were excessively increased, American workers have been paying substantially more than either Social Security or Medicare need annually.
The same is true of many other entitlements, except that some, like Unemployment, are drawing heavily on their bogus bonds in their bogus trust funds and the public is again paying a tax that was paid previously by employers but stolen. We are being double billed right now, today.
Social Security alone, your payroll taxes, produced a $98.7 billion surplus in fiscal 2001 and an $89 billion surplus in fiscal 2002 despite high unemployment; i.e., fewer workers contributing. All stolen by the Beltway Bandits.
The same CBO “testimony” of January, 2001, predicted a $3.7 trillion surplus from entitlements over the next decade. George W. Bush has done nothing to reduce these taxes.
While most economists agree that consumer spending is one of the keys to economic recovery, George W. Bush has done little to put money in the average man’s pocket. All he ever had to do was cut payroll taxes and it would have put more than a hundred billion per year back into the economy. Do you think $105 billion in the hands of workers in fiscal 2002 would have stimulated the economy?
He could also have cut other entitlement overcharges that, combined with Social Security and Medicare, amount to about $150 billion to $200 billion a year ripped off and spent by the government.
Instead, the federal government continues with its game of pretending to “borrow” this money in a scam that makes Enron, WorldCom, Arthur Andersen, Tyco and other private sector crooks look like children at play. The fraud and deceit involved here totals $2.8 trillion, 42 percent of the national debt. The entire “Intragovernmental Holdings” portion of the debt is fraudulent and composed of nothing more than double taxation markers with interest added.
This is the major problem, but the Bush administration has produced even more economic instability.
Fiscal Irresponsibility
After cutting taxes and knowing the nation was in recession because the stock market investment bubble had burst, fully aware that tax receipts for the coming years would be less, the Bush administration went right ahead a planned for even larger budgets.
In fiscal 2002, when Bush’s own Office of Management and Budget (OMB) predicted that receipts would be $1.85 trillion, the administration went right ahead and planned a budget of $2.01 trillion.
In fiscal 2003, the OMB predicted receipts of only $1.84 trillion, even less than the preceding year, but the Bush administration went ahead with a $2.14 trillion budget, $130 billion more than last year.
Any other organization faced with the same shortfalls would be cutting expenses, employees, and discretionary spending, but not the federal government. They pretend to have no waste and simply plan to borrow whatever additional money they want. And they call it “running a deficit” and treat it as though it was no problem.
Originally, when the budget was approved, the Bush administration was planning to run a $304 billion deficit, but that changed when receipts were even less than expected due to increasing unemployment and a sluggish economy.
Just a few weeks ago, we were told that the deficit for fiscal 2003 would be around $455 billion, but that also changed due to another unforeseen circumstance.
The bond market is having troubles. The government finds itself unable to legitimately borrow as much money as the borrowholics would like. Investors are less willing to loan the government money under what has been described as “the perfect storm” in the bond market. Now, the deficit is predicted to be closer to $400 billion and most of the back room researchers are putting next year’s anticipated deficit of $475-to-$500 billion on the monitors for millionaire news readers like Wolf Blitzer to mouth for you.
Hey, no one should have expected the bond market and the government’s unique ability to borrow honestly from investors to last forever. Eventually, these investors realize that it’s the taxpayers who must pay them back and the people are about tapped out. When they no longer feel that treasuries are “the safest investment in the world” they will invest elsewhere. Other than offshore investment, this could be the reason Wall Street seems to be doing better today.
Are we on the road to federal bankruptcy? As of Friday, September 5th, the national debt has gone up $584 billion. That’s the real deficit because it includes the money stolen from entitlements (above) and we’ve still got more than three weeks to go in the fiscal year. Greenspeak is strangely silent on all of this.
Other tricks
On February 20, 2003, the federal government hit the national debt limit of $6.4 trillion and did absolutely nothing about it for 92 days and with barely a peep from the media. In the interim, we invaded Iraq and spent all sorts of unbudgeted money on a senseless and illegal war.
During this three month period, one full quarter of the fiscal year, the government financed its folly with money scheduled for discretionary or social spending and every State, City, County and local government in the nation was shortchanged on things like Medicare, housing, and so forth. Already suffering from shortfalls in their own tax revenue, these local governments were further handicapped by the federal government’s refusal to come up with promised money.
Once the national debt limit was raised by almost a trillion dollars the feds were quick to replenish their own larder, but still haven’t passed much on to the local governments that are still suffering.
George W. Bush is being very miserly with the billions he’s borrowed and now wants $87 billion more to carry on the war on terrorism. And Congress is about to vote themselves a pay increase.
It would be funny if it wasn’t so nauseating. And most local governments still don’t blame Bush and his henchmen for their predicament. It’s a classic case of the emperor’s clothes.
“Published originally at EtherZone.com : republication allowed with this notice and hyperlink intact.”