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  xTuesday, August 12, 2003

ouch


CalPundit points to a withering critique of the Bush Administration from -- wait! -- the conservative Weekly Standard.
President Bush's compassion now impels him to give tax refunds to people who pay no taxes; free prescription drugs to Bill Gates and Warren Buffet, whose children will no longer be burdened with inheritance taxes; subsidies to already-rich farmers to produce outrageously expensive ethanol to add to gasoline; free insurance protection to utilities that own nuclear plants; tariff protection to inefficient steel companies; and subsidies to auto and coal companies to do research they would otherwise have to pay for out of their sales receipts. It almost--but not quite--makes one pine for the days of that cheapskate, Bill Clinton.

But fear not. In the Micawberesque world of Bushonomics, these are all free lunches: Taxpayers will simultaneously get these and other benefits, and tax refunds, and tax reductions to boot. Never mind that the due date on untold billions in unfunded liabilities lurks just around the corner.

Better still, we are on the verge of getting a restructured Middle East consisting of vibrant, prosperous democracies, and on the cheap. How is this latest feat of economic legerdemain to be financed? Why, with Iraqi oil, of course.

Both Deputy Defense Secretary Paul Wolfowitz and Office of Management and Budget director Josh Bolten managed straight faces when they told a congressional committee that it is impossible to estimate the cost of our nation-building adventure in Iraq.

Revenue from the sale of Iraq's oil cannot begin to finance the reconstruction of the country. Bremer, in what may be his ticket out of Baghdad and into the private sector with Lindsey, knows this: "We are going to have to spend a lot more money than we are going to get revenue, even once we get oil production back to prewar levels." Which means that Wolfowitz is either innumerate (unlikely), or is being economical with the truth when he says, "We're dealing with a country that can really finance its own reconstruction, and relatively soon."

...So there you have it: a foreign policy that promises enormous long-run benefits, but requires enormous short-term outlays, for most of which the administration has refused to budget.

...But if we are to call the tune, we have to pay the piper. The buck that stops in Baghdad will have to come from Washington. That's where the administration's foreign policy collides with its domestic policy. To retain control over the course of events in Iraq without sharing authority, the administration must trust that the American people can be persuaded that the costs of our foreign policy are worth bearing, given the likely benefits. It must then proceed to adopt a short-term program to pay for that policy, and a longer-term plan to finance that policy and its domestic initiatives.

...That done, the administration can address the financial problems created by the triumph of compassion over conservatism. For starters, whatever happened to tax reform? A truly innovative tax program--one that taxes consumption rather than work, pollution rather than output, windfalls rather than rewards for risk-taking--might indeed yield more tax revenues to finance foreign and domestic programs without adversely affecting the economy's growth rate. But if even a fundamental change cannot pay for all that the administration would like to do, it would then have to face the hard job of confronting the American people with the necessity of making choices, allowing us to decide whether we love our new entitlements enough to pay for them.

As to the last point, I, of course, am proud to pay my fair share to be a participating member of this fine society.

Bush's fiscal dishonesty -- not to mention his warped grip on reality -- is obvious even without considering this view from the right. Bush tried to pay -- no, is insisting on paying -- for a war with a tax cut. That policy has failed in the past and there's no indications it has any better prospects now. As Kevin Drum said,
George Bush, like LBJ before him, probably knows this [raising income taxes to pay for his Iraqi adventure] would never fly, so, again like LBJ, he's simply doing everything he can to put off the day of reckoning.

But how long can this last? Bush has already begun arousing suspicions even in middle America that you have to listen to his words mighty carefully to discern the truth, and this is a reputation that's hard to shake off once it takes hold. Just ask LBJ's ghost. If Bush earns the dubious distinction of being as straight a shooter as his Texas predecessor, I wonder if he'll suffer the same fate?

One can only hope.





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