Tax cuts and big new domestic spending programs. Isn't it always good politics and bad policy to raise spending and cut taxes. At home when I buy new diamonds, new wardrobes, and new closets full of toys I am always in the running for man of the year. It wins votes. But this means that we have high credit card bills and that we will not be able to send the kids to college and that we will have to put off retirement beyond 65. Since I have a term in office longer than 8 years I choose not to play Santa Claus that often.

Isn't Bush fiscal policy hurting this country. His policies seem to be raising hackles from the right on this.

The Quiet Earthquake in Spending

I will say this much for now, more later when I have time to look up some links. I am not happy with the fact that for all of the Republican's talk of smaller government, they don't put their money where their mouth is. I can't point to a single spending bill Bush has not supported, nor a single cut in the fed that he has made.

I really have no opinion on this as I see it as both good, bad, and ugly that he is spending all of this money. Good- at a glance, it is helping out our life by providing us with more benefits. Bad- WHERE IS ALL OF THIS MONEY COMING FROM?????. The last time I checked we had quite a bit of spending to make up for. Ugly- goes hand in hand with bad.....we will have to pay for all of this spending eventually.
This whole thing reminds me of a political cartoon where Uncle Sam was sticking a syringe in his arm labeled spending, or something to that measure, and he was saying "What? I'm not addicted!"

Eeyore I don’t think the current spending is out of line with the economic reality in the US over the past 2 years. If you look back you will see government spending rise during recessions and often taxes cut in order to stimulate the economy out of the recession.

That is exactly what Bush has done. The heavy defense spending is a response to 9/11 and cannot be avoided.


And the results are starting to come in:

http://www.nytimes.com/2003/12/02/business/02ECON.html?th

Manufacturing at Highest Level in Two Decades


By EDMUND L. ANDREWS and FLOYD NORRIS

Published: December 2, 2003


ASHINGTON, Dec. 1 — American manufacturing activity rose to its highest level in nearly 20 years last month as factories raced to keep up with demand and indicated a readiness to expand their work forces for the first time in three years, according to a survey published on Monday.

Two problems with your post:

1. Military spending has only increased by $100 billion this year, separate from the costs involved with invading Iraq. Most of that money has gone to a very few government contractors.

2. Cutting taxes does indeed spur the economy, but here's the problem with it: what do you do to raise revenue AFTER the economy gets going? Tax cuts don't pay for themselves and neither do those government programs that come from all that government spending. The government cannot continue to just borrow its way into succeeding; it has to pay back the money eventually. When is "eventually"? With this administration, it's ... well... NOT with this administration. Bush wants to cut taxes again for some reason.

I got it! If trickle-down economics works this well, let's cut taxes to $0. That'll fully fund for the government!!

Military spending is by no means the main engine driving the economy. Tax cuts lead to consumer spending which leads to increased economic activity and this activity is the what will “raise revenue” after the tax cuts. This is how the tax cuts “pay for themselves” many times over.
As economic activity increases government revenues increase right along with it. Remember the government (stat and local) TAXES just about all spending – some of it twice. More tax cuts will lead to more spending and so on.

Conservatives believe tax cuts are a better alternative to big government spending to increase economic activity but Bush is doing both and many conservatives are not happy with him over this issue.

Tax cuts do NOT automatically increase consumer spending. SOME of a tax cut WILL eventually be spent, but not all. Some of the tax cut just goes to paying off bills, which stimulates nothing. And tax cuts for the wealthy have a lower chance of increasing their "consumer spending" habits than a tax cut for lower- and middle-class folks. That's what's so screwed up about trickle-down politics (it's not economics, that's for sure!): the tax cuts would be better handed to folks who will actually spend the extra money on consumer products.

And trickle-down politics have NEVER resulted in a balanced federal budget, so why bother?

Anyway, I agree with you: Bush has never met a tax cut OR a spending bill he didn't like. Of course, conservatives will still vote for him, even as we go further into debt for some poor Democrat to fix later.

Well amf the tax cuts seem to be increasing economic activity somewhat as we can see. I disagree on “trickle down” and assume you are talking about the Reagan years.

Trickle down does work as will tax breaks for the “rich” as liberal incorrectly call it. The idea is that money given to any group gets spent again and again. You are right though the wealthier folks invest more (stocks, bonds etc) but this is needed in the economy as well and the effects of the spending moves through or “trickles” down. Reagan failed because he was a conservative President saddled with a liberal Congress and as we know the Congress is where the money gets spent. So Reagan gave tax cuts, ended a recession and stopped inflation but he could not stop the Dems from spending and later had to institute a large tax increase to pay for it all.

Oh well.

You're being revisionist here about history. Reagan didn't ONCE try to slow Congress' spending habits. Not one veto of a budget package; in fact, his budget requests were similar in size and scope to what Congress voted into law.

And please provide links showing conclusively that trickle-down economics actually generates MORE government revenue than before the cut AND creates a balanced federal budget.

Is this yet another thread to create a bleak outlook for the economy when it is actually rebounding right now.

It looks to me as if Bush's fiscal policy is driving our economy up, but I am sure there are those out there that want to bash it in hopes of keeping it down so it does not look good for him in 2004.

Would you like me to pull all my links from the other Economy related threads that are showing our economy growing?

^ Makes no difference how much the economy is growing, if I don't see any of it. Unemployment is expected to remain fairly stagnant throughout 2004, and it certainly will come up way short in reducing the unemployment rate back to where it was before the recession.

For what its worth:http://www.bls.gov/news.release/ecopro.t07.htm

Most of those jobs listed are in industries with low wage growth, fewer benefits, etc. Its doubtful that they will see any meaningful benefit from high GDP growth. And those that will see a benefit typically don't like to share, as witnessed in the latest round of tax cuts and budget defecits designed to kill the entitlement programs of the future. Even the General Comptroller of the United States predicts fiscal bankruptcy, or HUGE spending cutbacks in the next 15 years or so, if we continue the neo-con approach to economics.

The question shouldn't be about whether or not Bush's fiscal policy is driving our economy to ruin, but rather is it driving our society to ruin? I wont go so far as to say it is, but it certainly isn't going to make an improvement.

Also for what its worth, according to the latest CIA World Fact Book, India is ranked 3rd behind Japan in total GPD, with an expected growth rate of ~ 7% throughout 2004. Yet it is ranked 121st in per capita GPD. GDP isn't everything when looking at an economy. Wealth distribution also matters.

Amf nothing creates a balanced federal budget except fiscal responsibility in Congress. Reagan didn’t veto much since he was trying to get his military budget through and he did not have enough Republicans to stop an override in any case. Yes Reagan overspent on the military but many say (and I agree) this is what broke the Soviet Union.

For a view of “supply side economics” (which is what trickle down technically was) see this link.

http://www.friesian.com/sayslaw.htm

Reagan didn't veto much because he pretty much got what he wanted. The Republicans controlled the Senate. Yeah , the House was majority Democrat, but they weren't really Democrats. A good chunk of them were "Boll Weevils". The one from my home state, Phil Gramm, switched parties and won a Senate seat as a Republican after he got booted out of the House Budgetary Committee. Fact is, Reagan submitted ZERO balanced budget proposals to Congress, and he had the complicity of the Senate and the majority of the House. This idea that it was somehow the Democratically controlled Congress that ran up the deficit is just another lie of many told by the likes of Limbaugh, Hannity, and Scarborough.



So who's fault is it? The Democrats, or Reagan?



I never believed in "Say's Law". Demand drives supply. If production (and the wealth it generates) really drives demand, then why would my company even bother to lay people off? If there are more goods than buyers, Say's Law says its because there is a shortage of money, no? Then the simple answer would be for employers to fight the urge to lay people off, and instead give them all raises. But that doesn't happen. Why?

Back on topic, from the article "Is the deficit too small?" by Richard Rahn of the Washington Times.

.
Since 1963, we have had 14 years when debt has been below 33 percent of GDP and 26 years when it has been higher. Conventional wisdom is that economic performance should have been better in the years when we had less relative debt, but the facts are the opposite. Real economic growth averaged 3.47 percent in the high debt years, which was almost 1 percent higher than the 2.59 percent average growth of the low debt years.
Unemployment was also lower in the high debt years averaging 5.65 percent as opposed to 6.43 percent in the low debt years. Inflation averaged a whopping 7.6 percent in the low debt years, almost 3 times as high as the average 2.95 percent of the high debt years.
The Congressional Budget Office (CBO) estimates federal debt could grow to as much as 40 percent of GDP by 2005 and then begin declining again. From 1986 to 1999, it was above 40 percent, and we did quite well during most of those years. Recent data showing both much higher economic growth and higher inflation (meaning much higher nominal GDP) than the CBO forecasted means the debt GDP ratio in fact is likely to remain almost constant. (end of quote)

There seems to be a widespread belief that our debt is at a historically high level. This is true only because our economy keeps getting bigger. The key figure is debt /GDP ratio which is currently at historical norms. A government is not a person, the debt never needs to be paid off, and in fact should not be. The key is to spend judiciously and borrow likewise. After WWII we had a debt/GDP ratio exceeding 100%. I do not believe anyone would argue the money spent to defeat the Axis powers was irresponsible borrowing. What followed WWII was an era of prosperity despite the neeed to help with the reconstruction of Europe via the Marshall Plan. We are facing no crisis here. The costs of Iraq, as a percentage of our GDP, is miniscule and worth every penny if it succeeds in creating a democratic and prosperous Iraq. Deficit spending in a recession is almost universally accepted as the proper stimulus for a lagging economy. There is a growing acceptance, in economic circles, that deficits are acceptable in periods of growth, that the key is to manage the debt/ GDP ratio. The US debt/GDP ratio is not high when compared with post WWII US history or when compared with the current figures in the rest of the world.

But Hugo we are walking into the gaping hole of Social Security shortfalls.
Also, what is wrong with paying for our bills as we go. It seems to be fair to say that we have an emergency on our hands in terms of terror. I didn't think Iraq was the right war, but we should pay the money it takes to do things as well as we can there.
Didn't we also carry an extremely high tax rate after World War II and wasn't this was of the most prosperous eras of US history? Were we running large deficits or working at paying down our debt?

Short term, it's helping. Long term, it's disastrous.

We're falling in a debt spiral with our governmental deficit spending mentality. GWB has not demonstrated any leadership with any long term fiscal responsibility. Though I'm glad to have some of my money back, they can't just keep on increasing government spending.

I don't see how our debt will ever get paid off. Currently, our debt is $6,918,260,082,500.99. Assuming a population of 293 m, that's over $23,000 for every single man, woman, and child. Eventually, us taxpayers will have to pay for the debt. And when the bill man comes, it's gonna really hurt.

Eeyore: YES! Yes it is. He is spending like a LIBERAL DEMOCRAT. The whole reason why I support the Republicans is because I support SMALL gov't. The man has increased the gov't size, and in doing so uses more money. He has however stuck to his guns and lowered taxes, but that only works if you don't spend like he is now...not good.

CP

This reminds me...the sky is falling, the sky is falling!!!! LOL. I think we should be grateful he is spending what needs to be spent...with THE exception of the drug coverage. People need to start paying their own way in this country and fast. I personally hope most if not ALL social programs that aren't necessary are cut or gone. Time the federal gov't to get outa our lives and get back to what they are supposed to be doing.

cusbilla

Actually, I agree with Hugo for the most part. No matter how you change taxes or spending, a capitalistic economy, in time, will always balance itself out. The result of this balancing is what we need to agree on. Sure, given a long period of time, Bush's plans will "balance" our budget. The side effect is that the rich get richer and the poor get poorer.
Lets take a look at how Supply-Side-Economics might effect a public corporation:
In order to avoid paying taxes, corps will usually increase spending since they are taxed on profits (revenue-expenses=profits or income). Why should they give the government money when they can spend it on something that may increase demand for their product or service? Increased spending on advertisement, wages, etc. All these things contribute to our economy. So if the corp is hardly paying any taxes (most large corporations will show more losses than profits over it's lifetime), why do the wealthy shareholders want tax cuts?
Corps will often take advantage of low taxes to increase the value of it's stocks. Now that taxes have been cut, the corp can show more profits and pay close to the same taxes as before the tax cuts. If there is no increase in demand for their product, how can a company increase it profits? Cut expenses. Cut wages, stop advertising, reduce bonuses, etc. Now that the company is showing increased profits, the demand for the corp's stock rises, increasing its value. Now the major stock holders' stocks have made them even richer. That's why Bill Gates' net worth rises and drops with Microsoft's stock value.
Sure, when people buy more stocks in a company, it gives money to that company to spend. So the money goes right back into the system, but who is benefiting the most? The "rich".

otseng, I don't think you realize that we ARE paying off our debt. We always have been. If you look at the link to track the budget that you supplied in your post, $6,918,260,082,500.99, you will notice that our debt has steadily increased, even when Clinton had balanced our budget. As Hugo had pointed out, it really doesn't matter if we completely pay off our debt or not. It's as if I buy a $1000 TV with a credit card in January, pay it all off in February and buy a $1200 stereo on the same card. My overall debt may increase, but my creditors are happy, I'm happy, and I'm putting more money into the economy. Our payments towards our debts is considered just another expense. So if we can manage to increase our income to match our total expenses (including the amount allotted towards paying off debt) the budget is considered to be "balanced". Once we begin to accumulate a surplus, we can increase our payments towards debt reduction. But why do that when we can now afford to borrow more money and still have a balanced budget? If we borrow more money we can increase our rate of economic growth.

Soooo, as Hugo had pointed out, our deficit has increased over the years, but that's what has helped our economy grow. No one ever seems to point out those figures.

First off, I don't know who this "conventional wisdom" came from, but it's clear that when you spend more than you take in by issuing debt, you can increase the overall size of the GDP by the amount that you finance. That's simple economics.

It's a short-term economic gain to increase the debt, but a long-term problem if our creditors -- predominantly Social Security, which will need that money in about 12 years, and Asia -- want their money back. Or if they face a liquidity issue and decide to dump our securities on the open market (want to see how fast we'll be able to fund future debt then?).

It's coming. You can close your eyes to it, but think of this: China will most likely be our biggest economic rival in 10 years and they own a LOT of our debt. What if they decide to go to economic war with us and dump their US bonds on the open market all at once just to get back at us for some trade issue (like taxing the textiles we import from them)?

There is a lot of paranoia out here. Once again our debt to GDP ratio of nearing 40% is 2.5 times lower than it was after WWII. Then we did not have the advantage of other prosperous nations around the globe to trade goods with. We now have a far wealthier world and a much larger economy. Most of our debt is also internal. Those who fear China today remind me of those people in the late 70's who saw Japan as surpassing the US economy. It never happened,did it. Those who want a glimpse of the problems China faces need to go to this site. China won't be threatening the US economically anytime soon.

The one legitimate concern, which Eeyore pointed out, is the Social Security situation. Let me just say that the old age pension problem is a concern of all Western nations. Lower birth rates and rising life expectancies are not unique to the US. The solution will be some combination of higher taxes, reduced benefits, increased legal immigration and privatization.

The debt to GDP ratio is just as high in most of Europe, it is approaching 140% in Japan, while the Japanese economy has been in a long slump I don't think anyone can say it ever imploded. Certainly if we are nearing a crisis point Japan should have entered the status of a third world country long ago.

Having said all that irresponsible borrowing and spending is a burden regardless of the debt to GDP ratio. Tax cuts in the midst of a recession is a Keynesian (liberal) idea that replaced the classical economists idea that the budget should always be balanced. Amazing that Ronald Reagan and George Bush are the most unabashed Keynesians of our era. Deficits in time of prosperity are not necessarily bad as long as the debt to GDP ratio is watched.

Sad, but true. It's a rare politician that can say no to having money now and postponing the consequences til after their term.


The problem is that we can't continually be running a deficit. I would say that it might be acceptable during hard times, but during times of prosperity, the goal should be to be in the black (and not through projected income, but with actual income).


Consider me to be one of those paranoia leaning types. The problem is that I don't see the government taking any serious actions on the fiscal problems we are having. The inevitable Social Security implosion is one example. It is not out of the question that the US, or any other first world nation, could implode. Argentina was once the strongest economic country in S. America. Their implosion was caused by unsustainable debt. Even here in the US, we have seen major corporations implode by massive debt.

I don’t think our corporations necessarily pay “low taxes”. Compared to what? France? And lets remember corporations don’t pay taxes – we do. They pass the taxes as costs along in then price of the product. If the taxes are too high and US corporations become uncompetitive with foreign companies jobs and revenue are lost.

And lets remember we have 17,000 some odd “corporations” and only a few of them are “multinational”.


As for an increase in "demand for the product" (or lack of it) you have to realize that the "price" of the product directly effects demand for it.

Smeliot, here is where your argument falls apart.

Because the government is not paying off that $1000 credit card bill at the end of the month, and then buying the $1200 stereo. They are only paying the interest on the debt, right now.

It's as if you bought that $1000 TV in January, and when the bill comes due, you only pay the minimum amount on the card, say $30.00. And then in February, you still go out and pay for that $1200 stereo, and at the end of the month, still pay just the minimum, except now the minimum is $60.00. Now, if you get to your limit on your card, and have trouble making even the minimum payment, what happens? Your interest rate is liable to go up, as well as making new credit harder to get. And the higher interest rate means you are paying an even larger minimum payment in March, say $80.00. What could you do with that $80 instead of paying it to the bank?

Unlike your credit card analogy, with the government, there is no "bank" to place a total limit on how much you can continue to pile on to your credit card. But, when the government goes shopping for additional money, (issuing bonds and the like) their interest rate for both short and long term debt will go up, meaning the minimum payment will be even higher. That means less tax revenue to actually pay for services, and more and more going just to make that "minimum payment" to cover the interest.

Continuing to borrow and spend, while cutting taxes, will not in any way balance the budget. It will only make it that much more difficult to pay for government in the long run, as more and more tax dollars go to paying the interest on money we've borrowed for what we are spending now.

I meant "low taxes" as in lower than before the tax cuts.
Companies don't go out of business due to taxes, is they aren't showing a profit, they aren't paying taxes in the first place. Yes, I do agree that lower taxes will eventually result in an increase in demand, but not when it's done in a fiscally irresponsible manner.

I realize that my analogy wasn't a true representation of what is actually happening, I was just trying to show the benefits of increased borrowing.
I realize that we are only paying on the interest, and that is where the whole fiscal responsibility issue comes into play. If Bush is increasing debt while simultaneously increasing expenses and decreasing income, he's only making it that much harder to pay on the principle. Can tax cuts and increased spending boost our economy fast enough to keep up?

Let me explain how you can run a deficit yearly and still be better off. Simple numbers Your initial income is $10,000 a year, you have an initial debt of $4000. Interest rate is 5%. Income after interest payment equals $10,000-(4000X.05)=$9800. Debt/ income ratio is 40%, Interest payment as a percentage of income is $200/$10,000= 2%. The next your income goes up to $10,500 a 5% growth, you run a deficit of 5% of your previos years income increasing your debt to $4200. Income after interest $10,500-(4210 X .05)= $10,290.00. Debt/income ratio now remains at 40% (4200/10500). The fact is as long as there is growth in income the debt/income ratio can remain the same, in fact even grow, and the economy can grow richer and richer. The key is if the debt is being used to generate income, or is it being wasted? Almost all corporations utilize debt. The people with the lowest debt/income ratio are the guys sitting on the street corner holding the "I'm Hungry, God Bless" signs.

Having said all this I think Bush's spending is irresponsible, I just think our economy is so strong that it can easily withstand it. 20% of the world GDP is due to the American consumer. Any nation that wishes to bring down the American economy better realize that is an awful big domino.

I agree that if the income is growing at least as fast as debt, the debt/income ratio is not a problem. But this is a dangerous game to play. Once income falls, you're trapped. The responsible thing to do is to pay off the entire bill every month. And to not keep rolling over the debt and hope that you don't lose your job.

However, your analogy is a little flawed in that the income the government receives is not GDP, but taxes collected. Since 1969, there has been a shortfall between taxes collected and governmental expenses. And how does the government make up the difference? By issuing more debt. Enough reason to be a little paranoid? I think so.

Actually, the flaw is a HUGE one, not a little one. The folks who compare our debt to our GDP are missing the point you made that WE DON'T TAX GDP. We tax income (and other things, of course).

What I think are more important measures are this: (1) percentage of interest paid on the debt to the income received, and (2) size of debt to total yearly revenue.

Our current tax structure has us taxing at just around $900 billion yearly. Our federal debt is currently 7.5x this (I've done lots of rounding here). That means that if we spend 7.5 years collecting the same amount of taxes, we'll be able to pay off the Federal debt, except that we won't, because we didn't leave any money aside for actually running the government.

Our interest payments are nearing HALF our revenues. That's just completely unacceptable fiscal policy.

Your data is flawed by quite a bit. I suggest

http://www.heritage.org/research/features/...harts_C/c2.html

cusbilla

Ok, so I went to the OMB site to get real numbers (or as real as it gets ) and here's what's what for 2003:

Individual/Corp. tax revenue: $992 billion. Excise tax: $68.4 billion. Other: $49 billion. Total: $1.1 trillion. This does not include social security revenue, which is not part of the budget.

Interest is $318 billion for last year. My bad on that part; we had been approaching $400 billion a few years ago, but low interest has helped that number a bit.

So... Our debt is 6x our tax revenue and interest payments are running about 30%. For now. Until interests rates go up to normal levels again, which they will.

Doesn't change the premise of my posting.

Edited to add:

Thinking more about the GDP to debt thing. I think it might be more valid to consider GDP to TOTAL debt (including corporate and personal), since those are also components of GDP. But just limiting the comparison of one type of debt (government) to GDP (which includes ALL spending and income) is misleading. But even comparing those numbers to try to draw some conclusion about whether debt is good or bad is probably not valid, since it's not how much debt you have but how much MORE debt you can get before it gets cut off that tells you when you're in trouble.

It depends amf. Look at when you purchase a house. What is it's value as opposed to what you bring in every year? I think the "sky is falling" is ridiculous. Tax revenues will go up and "IF" the US can HOLD spending and a level or grow it at mabe 1% for a change it can be brought under control. But, until the young people in this country get out and vote...expect the seniors to rob you blind.


cusbilla

The bank won't let you buy a house worth more than 3x your yearly income. If you borrow more than that, the bank MIGHT do it, but will charge you higher rates. And at some point, they'll just cut you off and make you start to pay down your debt.

We're at 6x and climbing (projections are for $500 billion more debt for next year).

I think the political conversation over spending and taxes is completely dishonest. Politicians sell tax cuts without talking about the service cuts that have to come from it. People don't want service cuts. So, the politicians do the easy job: they cut taxes and borrow the rest, leaving the problem for someone else to solve. Bush and crew have done this in the past two years and there's no possibility that spending will ever get cut with this group.

The problem with the monster debt is that about 60% of it is borrowed from Social Security, which will need that money in about 10 years or so. With no "surplus" in sight, that means in 10 years, the government will have to borrow even MORE money on the open market -- at higher rates -- in order to fund their (at that time) current level of spending.

And that's when the sky will definitely fall.

The key is if the debt is being properly utilized to grow GDP. There are solid reasons economists look at the debt/GDP ratio. High GDP gives you the ability to pay off debt. I personally prefer that debt be relatively balanced over the business cycle. There are those on both sides of me. A few (not many with any knowledge of economics) who would insist that the budget remain balanced at all times. This means raising taxes in a recession. There are those who believe that the government can continuously stimulate the economy with deficits providing the debt/GDP ratio remain under control. It was the failure to stimulate the economy in the '30's that aggravated the Depression. Only WWII forced FDR into fully utilizing the Keynesian solution. I will state again our old age pension plan, and debt/GDP ratio is not out of line with the economies of the Western world. We are in a much better position than China, which is facing a possible crisis. The only additional problem we face is a current account deficit. On this Bush is following the rational policy of allowing the dollar to devalue.

I don't think it is any business of government to interfere with the consumers choice of how much debt to take on.

But is it? A good chunk of it is going into financing a war. Unemployment isn't expected to significantly change in 2004. And the federal defecit could have adverse effects on long-term interest rates.



But by how much? The CBO estimates that the deficit will grow by 13% in 2004. When was the last time our economy grew by 13%?



I always thought the debt/GDP ratio was used as an indicator to predict gov't spending and its effects on long-term interest rates. The higher the debt, the more likely it will adversely affect interest rates. So while the debt/GDP ratio now might not be a big deal, what if the gov't continues to borrow more than it brings in, as its expected to do under the current administration? You can only borrow so much before you find yourself in an unescapable downward spiral as your tax base shrinks, and the cost of borrowing goes up.

My personal opinion is that this administration is intentionally engineering a fiscal crisis in their attempt to kill gov't entitlement programs. Rather than leave it up to the public to decide , the neo-cons are effectively going to remove SS reform from public debate, and going to force their version of reform down everyone's throats. Either that, or go bankrupt. So much for democracy.

I think what people are ignoring is the positive effects of capital accumulation. Is much of Bush's spending irresponsible? I would say, yes. Is he driving our nation to a financial crisis? No. What people also ignore is that larger economies can carry a higher debt to GDP ratio.

If you give free markets a chance, and there are few Western nations that allow free markets a free a reign as ours, they can produce enough to make up for a lot of irresponsible government spending.

People also mention that the money spent on war is a waste. I don't think anyone argues that the money spent on WWII was a waste. If, it's a big if, the war on Iraq results in a democratic society that serves as an example to others that there is hope and terrorism is unnecessary then the money is not wasted. I don't want to get into a debate of the Iraqi war here, I will just say that defense against internal and external aggressors is the primary purpose of government.

Answer: Not quite

His tax cuts combined with corporate rebates and making a more business friendly country has push the DOW over 10,000...the hallmark of any good economy.

The Wall Street Journal reported today the the job rate will boom in 2004 and the picutre looks rosey for the economy.

The bad part is that the President is not spending like a true conservative. he is spending alot to deflect Democratic attacks. His way of stealing thew issues away from the opposing party.

I am a 'constitutional conservative' (I made that up) which basically means a very small government and little government spending. I recommend Joseph Farahs book "Taking America Back". Most government programs are not authorized by the constitution and should be scrapped.

The DOW is the hallmark of nothing. Most economists HATE that number because it's computed uselessly and only includes 30 large corporations. The Russell 2000 index is a better reading of the health of the broad market of publicly traded companies.

And the WSJ doesn't "report" what might happen in the future. They will get some economist or strategy guy at one of the big investment houses to say something that fits with their scenario, but you can't report what hasn't happened.

I'll leave your personal views alone, though

And the question originally posed isn't really one of short-term results, like those you'll see in the stock market or even the weekly unemployment claims number. It's whether having to float 400+ billion a year in new bonds in order to pay for everything in the Bush budget will eventually screw our economy into the ground.

This is a typical opinion from the left. I sincerely believe that most Democrats have no idea how capitalism works, why it works, they just like to benefit from its largesse. The Federal Budget is about 1.4 trillion dollars, while the GDP of the US economy is over 100 trillion dollars. Liberals can't seem to understand that the federal budget is not the nations checkbook. It is a very, very, very small part of the overall economic activity in this country. The government plays a very, very , very small role in the handling of our nations economy, that's why we are a CAPITALIST country. Bill Clinton was blissfully ignorant caretaker of the supposed good times of the mid 90's(which we have come to realize weren't so good). George Bush will have no impact either. Bill Gates, Jack Welch, Bill Ford, Donald Trump, etc, these are the men who impact our nations economy every day. The government can mess things up for sure, with high taxes, protectionist tarrifs, rules and regulations that hinder business, but there is not any substantive they can do to improve things.

Off by an order of magnitude, according to BEA figures. Would you like to tell us again who doesn't understand the role of government in the economy?

According to your BEA stats, the US GDP is 10.5 trillion dollars. Ok, so now the federal budget is about 10% of GDP, there I can subtract and divide. But why can't liberals do the same when we find that the top 50% of taxpayers pay 96% of the taxes? Or why democrats expouse a tax cut as a gift to the rich, when it is the RICH'S money to begin with, as it is with all taxpayers. Democrats can't bear the fact that all tax revenues collected come from the american people, not some government money tree somewhere that grows from lefty eggheads at Harvard, Hyannis or Chappaquidick. Without the power that comes from our money, politicians are powerless. SO next time you Clinton backers and Robert Rubin benchbackers lay claim to some mythical responsibility for the fake good times in the 1990's, rememeber, Bill Clinton NEVER HELD A PRIVATE JOB, and HE NEVER CREATED A PRIVATE SECTOR JOB EITHER. Bill Gates, Jack Welch and all the aforementioned folks did that. Now who understands?