A sense of the unreal contaminates Bush budgets. The CBO today stated its forecast of the Deficit over the next ten years would be $885 billion. It totally ignores Y2003--$377b, Y2004--$480b, and Y2005--estimated at $368b (this to pretend Bush is working on the Deficit). Two years at Y2004 levels would break the CBO estimate, three years at the Y2003 level or Y2005 estimate levels would break the CBO projection for ten years. Two Comments: the CBO should be instructed to run mid-Decade evaluations--five previous and five subsequent year estimates; and all known Federal expenses should be used in the estimate.
Absolutely no one, inside or outside the Washington Beltway, expects the Federal Government to actually reduce Spending levels. Bush will not put military expenses in Iraq and Afghanistan in his Budget--expected to be a total Cost since the start of $300 billion by the end of the year, or $100 billion per year rather than the projected total $100 billion over a decade quoted by the White House at its beginning. Privatization of Social Security will definitely cost $2 trillion by Y2030, and probably cost that much by Y2015. Elimination of the Alternative Minimum Tax is projected to cost $500 billion by Y2014; nobody mentions this is estimated with an Inflation rate of only 1.3% per year--not likely with the Bush Dollar policy and Debt accumulation. Making the Bush Tax Cuts permanent are estimated to cost $1.2 trillion through Y2014; nobody mentions this Cost was estimated with Y2003 Production levels and Inflation rate. Certain Estimates evaluate the new Drug Proscription law will cost three times the Projection used by White House and CBO. Spending Cuts are not the Odds-On favorite in Las Vagas casinos under a Bush administration.
Very Rough Rules of Thumb:
1) American Imports are increasing at a faster rate than American Exports, though both numbers are going up with American Exports close to the rate of Inflation; therefore, actual physical American production is static or declining.
2) Making the Bush Tax Cuts permanent will cause CBO used Tax revenues in the Projection to decline by 8% per year, if American production is static.
3) Elimination of the AMT will cause a 1.8% decline in the above Tax revenues, if American production is static.
4) Because the Federal Government borrows and spends all surpluses of the SS Trust Fund, Privatization of Social Security if American production stays static, will cause about a Percent drop in those Tax revenues.
American Production, without curb on American Imports, will not provide Tax revenues at the pace of Inflation. Most Republican desires will be realized by the current Congress and President. American Tax Revenues will decline by at least Ten percent adjusted for Inflation, under the impact of these measures. Growth of Federal Spending, because of already-passed or pending legislation likely to be passed, will increase at approximately four times the rate of Inflation. Bush and Republican refusal to curb Government spending, limit Imports, or raise Taxes will require funding for Shortfalls to come from Debt aggregation. The Dollar Inflation incited will eventually come home to America, through foreign demand for higher Interest rates on Government debt, and higher Prices on Imports.
The Bush Budgets are simply dragging down the American economy. It remains a fallacy to say the Dollar decline will make American production more competitive in the World market. The competitive edge for American Products will be absorbed by higher Foreign Materials Pricing on Materials essential to American production. Such foreign Pricing has already effectively doubled American Consumer debt. Bush obstinence to Tax Increases will have to be broken, and long before the expiration of his Presidency. lgl