American Politics Journal

Borrow And Bribe
A Primer on Voodoo Economics Jr.
By Mike Hersh

August 2, 2001 (www.BushOccupation.com) -- Ronald Reagan attacked "Tax and Spend" economics; so many called his wasteful failure "Borrow and Spend" economics.

Now, Bush, Jr. is bringing us Supply Side, Jr., adding a new trick to "Trickle Down": he hopes to fool us by bribing us with our own money!

He hopes we will support his short-sighted and heartless class warfare policies which will hurt almost all Americans, and only serve to enrich the idle wealthy with a short term benefit -- call it "Borrow and Bribe" economics.

During the failed Reaganomics era, we saw our economy almost plunge into another Great Depression thanks to these "Borrow and Spend" policies. Reagan ran on a promise to balance the budget by 1983, then failed miserably after lying under oath to the Congress on countless occasions, using the fraudulent "Rosy Scenario" and "Magic Asterisk" -- infamous cooked book tactics admitted to by then-OMB Director David Stockman.

Reagan's profligate and reckless overspending on the real but grossly exaggerated Soviet threat wasted TRILLIONS of dollars. His equally profligate and reckless tax cuts, mainly targeted to the wealthiest individuals and largest corporations in the nation, cost the US Treasury HUNDREDS of billions of dollars per year -- and failed to stimulate economic growth.

Former Texas governor George w. Bush's father called this approach "Voodoo Economics," and Bob Dole called that statement one of the few times the elder Bush was right about anything. They joined the GOP- led Senate and the entire economics profession denouncing "Supply Side" economics as just another gimmick in the form of a "Trickle Down" tax cut for the richest at the expense of the rest -- with horrendous consequences for the national economy.

Fast forward to today: now the Supply Side liars are at it again.

Bush Jr. -- or, more accurately, the cadre of greedy plutocrats who pull his puppet strings -- hope to buy us off with a cheap "rebate" which turns out not to be even a rebate at all! They are loaning us our own money at a high rate of interest -- and telling us it's "tax relief"!

Adding to an impending disaster, the fiscally reckless Republicans are trying to use their own bankrupt policies as a pretext to loot Social Security and Medicare -- programs they've always opposed -- to give money we invested for our retirement to the idle rich and corporations!

The Republicans are actually looting our national life's savings, and giving our money to their cronies and biggest contributors. This is the Neil Bush / Silverado S&L approach writ large. They are robbing us blind, and lying to us as well. They are borrowing money in our name, giving us only some of the money, saying it's ours free and clear, but they will take it away from us next April -- and charge us interest!

Our promising fiscal future, which seemed so bright just months ago, is now as bleak as the economy was when Junior's daddy was mishandling the country. The economy is the weakest it's been in eight years.

Meet the new Bush recession -- just the same as the old Bush recession.

As a result, we must either raise taxes to pay for the interest and the "rebate," further delay and increase the cost of paying off the enormous Reagan/Bush debt, squander our pensions and health care or pass along more debt to our children -- most likely, all of the above!

Any way you look at it, they are taking our money away, giving us back some of it but overcharging us for all of it, and lying to us every step of the way. If someone tried this in the private sector, they'd be guilty of fraud and lone sharking.

Coming after the success and fiscal restraint of Democratic economic policies, this is outrageous.

Reagan couldn't change the laws of arithmetic, and neither can Bush. The Republicans have put us in a no-win situation. Because of the reckless and unfair Bushwhack tax plan, our hard-won and needed surplus is gone.

Our economy is in deep trouble, and neither "Borrow and Spend" nor "Borrow and Bribe" will help.

Following are extracts from Jonathan Fuerbringer's "Treasury Is Planning to Borrow to Cover Cost of Tax Rebates", published July 31, 2001 in the New York Times -- an outstanding assessment of the absurd Bush "Borrow and Bribe" shell game, and how much these little fraudulent "rebates" are going to cost us.

"The Treasury said yesterday that it would borrow the money needed for the tax rebates now going to taxpayers as part of President Bush's $1.35 billion tax cut."

"...the economy and tax revenue have slowed drastically."

"...the administration and Congress are coming dangerously close to doing something they have promised not to - dipping into the Social Security surplus to pay for tax cuts or government spending." As recently as January, the surplus was forecast to be $281 billion.

"'If things continue to deteriorate, you will be there this year,' said Robert J. Barbera, chief economist at Hoenig & Company, of the possibility of using some of the Social Security surplus."

"...the Treasury said that slowing tax receipts, a change in the due date for corporate tax payments and the $38 billion price tag for the tax rebates had radically changed its plans for borrowing...."

"Instead of paying down $57 billion in debt, as the Treasury had expected on April 30, the Treasury now plans to borrow $51 billion."

"In April, the 10-year tax cut program, including the rebates, had not been completed. Nor had Congress voted to delay corporate tax payments to Oct. 1, the first day of the next fiscal year. That moved about $30 billion from this year to next."

"...the June budget surplus came in $24 billion below the previous year's level..."

"Treasury officials said that receipts in the third quarter would also be about $20 billion less than they had expected."

"...officials were worried that with the tax cut the budget surplus for 2002 would not be large enough to cover government spending without dipping into the Social Security surplus."

"Louis Crandall, chief economist at R. H. Wrightson & Associates, noted in his commentary for this week that 'this particular exercise in smoke and mirrors will cost the Treasury more than $40 million in lost interest income.'"

"...the Treasury bill sector will continue to be inundated with new issues, with about $100 billion in new Treasury bills in the third quarter, according to Mr. Crandall. The expectation of this wave of bills has already driven up the yields on three-month and six-month Treasury bills compared with similar short-term offerings."

Mike Hersh is webmaster of www.bushoccupation.com.