How the Deficit Affects You Personally





Mr. Steinhorn, a former political speechwriter, is an associate professor of communication at American University. He serves on the HNN corporate board, and is writing a book on the cultural impact of baby boomers, to be published by St. Martin's Press.

When President Bush sold his tax cut plan to the American people, he made sure to tell every American how much money they would be getting back from Uncle Sam. In 2001, he trotted out a typical "tax family," claiming that his plan would return $1,600 to these average Americans. This summer he happily took credit for the $400 per child tax rebate many Americans received in the mail. It's our money, he told us, not the government's, and we deserve to get it back.

But his sales pitch is a bit different now with the $87 billion he wants Americans to pony up for his war in Iraq. At no time has he specified that $87 billion translates to about $300 for every American man, woman and child. At no time has he trotted out a typical "Iraq tax family," showing how a family of four would owe about $1,200 this year for Iraq and perhaps more in subsequent years. At no time has he admitted that this Iraq tax may not only wipe out but trivialize whatever benefit most Americans expect to receive from his tax cut.

The president is not the only politician who uses these political communication techniques. All politicians know that when you want to sell people a policy they might like, you tell them how it would affect them personally. But when you want to sell the public on a more distasteful idea, you leave the specifics as vague as possible -- the less they understand them, the better.

It was a lesson politicians learned with a vengeance a little over a decade ago, when the public barely raised a peep about the trillions in federal debt accumulated during the Reagan-Bush years, but nearly revolted when a mini scandal broke over the way some members of Congress were abusing their banking privileges and kiting checks for a few hundred or a thousand dollars. A trillion dollars meant nothing to us, but $900, that was real money.

Illustration by Joshua Brown, Historiansagainstwar.org

Just imagine how our national tax and budget debate would change if the politicians and news media began describing the federal deficit and debt in terms we could taste, feel and understand. Our federal deficit this year, roughly $550 billion, seems incomprehensible to most Americans, so mammoth that it no longer seems tangible. But now translate that to every American man, woman and child. Instead of talking in billions, what if Dan, Peter and Tom told us every day that each of us is now about $1,900 more in hock this year than we were a year ago?

Or think about the total debt we'll accumulate during our four years under George W. Bush -- according to reliable estimates, about $2 trillion. That's about $6,900 each of us will owe, every American man, woman and child, and especially the child, who will have to pay it off the rest of his or her life. For a family of four, the Bush debt amounts to liability of nearly $28,000, a hefty sum that amounts to almost two-thirds the annual median income of the typical American household.

The president obviously has no political interest in pitching his Iraq tax and deficits the same way he sold us on his tax cut plan -- showing how it affects us personally. Perhaps that's what he meant by "fuzzy math" in the 2000 presidential campaign.




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Karen - 12/16/2003

Your article is appauling and fictitious. Your numbers are based on the hypothesis that we will be spending the same amount every year, real problems need real solutions. Since you have not come out with any solutions, I will assume you dont have any. The war in Iraq may be costly but the world is now a better place because of it, and with Sadam captured, scientists are comming out and admitting that there were without a doubt biological and chemical weapons present in Iraq and also get this nuclear capability. The scientist said whenever the weapons inspectors were planing on coming in Saddam had them move the weapons into Syria and Iran. I don't know if you could possibly understand how the deficit is financed. They dont come knocking on our door for the money it is absurd of you to suggest that everyone is going to have to pay $56,000. With GDP at 3% we typically get back 200,000 jobs a month and the deficit will melt away by 2010 granted that does not include the recent medi-care bill cost, so lets add 400 to cover that just for the hell of it. But you must also factor in that GDP is above 8% right now, thanks to president bush's tax cuts. So by all means your calculations are fictitious and unreasonable. Lets go back to what you said about how social security and medicare are the only assets people who make under $40,000 have, and although that is the case the problem isn't with the government it's with the people. It is horrible to rely solely on the government for anything did people forget how to plan for the future or do they just not care. I dont care how much money you make if you save and invest you should have no need to rely on the government. So bush isn't screwing anyone they are screwing themselves when they neglect to think about their own future. The government as nanny is horrible idea for the people competent enough to do things on their own, it is costly and inefficient. So next time you decide to blame the tax-cuts for all the problems in the world maybe you should instead look to the people who dont pay taxes and ask them to stop being so worthless because it is ruining our country. Why should the hardest working people in america be punished because they care about making money and saving. Poor people live way above their means and rich people live way below their means and that is why things are the way they are. Republicans are good for anyone who is willing to do something to help themselves by saving money and investing it, they have even created a tax shelter for people who dont make that much so they can save without being burdened by the high taxes the democrats love to impose on the people for their social programs that do more harm than help. If people would be willing to do more on their own it would solve most of the problems democrats always complain about yet have no solution for except to take more money from the people who work the hardest and the most. What is preventing anyone who makes under $40,000 a year from going to college community college is extremely cheap so don't try to say they don't have the means, the answer is they chose not to so why should they get paid the same for a job that requires little to no skills as they would someone who worked their butt of to get a degree. Being rich is a choice just as being poor is. You have to live with the choices that you make and accept the consequences of those very choices. So why should I feel sorry for people who chose not to work as hard as I do. The only reason I'm going after those people who have next to nothing is because those are the very same people saying very negetive things about the rich. I would not care what they do if they weren't complaining so much about how things are because ultimately they are solely responsible for their own failure. If you hate us so much stop being so insistant upon taking more of the money we work hard for, because that is the only reason we have something against you. Putting people down for working hard and getting an education is just plain silly, I just dont understand why it is so accepted. Democrats not republicans are the ones who typically tend to be fiscally irresponsible, so in times like these when you have to spend money to make things better dont act like this spending is something that will continue in the way that it has been going with a republican administration, they are the ones who promote responsibility in every way shape and form. The democrats simply make up for their spending by raising taxes and although it does help the deficit, taking more money from the people who work the hardest is just stealing and it is not good for anyone who is productive and it is certainly not good for the economy over time. Sometimes tax hikes are neccessary but only when there is a budget that needs to balanced such as state budgets. After all the effects of high taxes and no growth can only lead to failure as president clinton showed us in the last year of his term, but it wasn't aknowledged until this year when the numbers from 2000 had to be revised because instead of the exteremly low positive GDP from the 3rd quarter of 2000 it was actually found to be in the red (negetive) off by 1.1% not huge if your talking about return on equity but for gross domestic product it can mean the difference between success and failure.


Carl Donsbach - 11/3/2003

We have gone from a $500 billion surplus to an even larger deficit. Nor does there seem to be more money in the general economy; it seems to be further concentrated in the hands of the very wealthy. I don't claim to be an economist, but common sense and history indicate to me that there is indeed less revenue.

Although I don't claim to be an economist, I do know from experience with credit cards and bank loans that deficits generate interest, and the beneficiary of that interest is the loaner. Who is the beneficiary of the interest the taxpayer is now paying on the deficit? Certainly not the taxpayer; we are the ones paying off that interest. So who are the big lenders that are raking it in?

Conversely, when there is a surplus, who benefits from the interest it generates? The taxpayer, I guess, since that interest generated by that surplus would offset the amount we would need to pay into the system. From my point of view (since I am not a lender), it would seem logical to have as large a surplus as possible so as to allow the generated interest to pay a larger share of my taxes for me.

Mr. Steinhorn has reminded us that we now own a deficit. The one weakness I find in his argument is his failure to mention that by the same token we recently owned a surplus, since in a republic, the citizens (i.e. the voters) own the government and its assets.

-Carl


Don Williams - 10/27/2003

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Don Williams - 10/27/2003


Let's try Mr Steinhorn's approach and calculate the costs per household of the additional $3 Trillion in federal debt (held by the
Trust Funds) that Bush now says will exist in 2008 as a result of his administration.

Notice the income distribution table at http://tiger.berkeley.edu/sohrab/politics/income_00.txt. Summing the number of households
indicates that in 2000 there were 50.547 million households with income less than $40,000. These households will not have any
assets that can be taxed in retirement to pay Bush's IOUs --and Bush's IOUs will have to be paid because Social Security/Medicare
are the only retirement assets these households have.

Similarly, the 4.9 million households above the $150,000/yr range won't accept greater taxes to pay Bush's IOUs. (It only takes
one corrupt Senator to filibuster such a tax increase or one corrupt President to veto it --something the rich can easily buy
under the Republican Congress' campaign finance system).

That leaves the middle class -those in the income range of $40,000 to $150,000 --whose "before tax" deposits trapped
in 401K/IRAs can be taxed at up to 99% if the government wants. There are 53.570 million such households

$3 trillion spread across 53.570 million households yields an additional debt of $56,000 per household. Note that this is just
the additional $3 trillion in debt that Bush has created in the last two years --it doesn't include the other $6.3 Trillion in federal debt.

During the 40 years of the baby boomer work life, Reagan/Bush1/Bush2vcould run up huge debt --albeit at high costs in hundreds of
$billions in interest payments. When the baby boomers begin retiring in 2011 however, the chickens come home to roost--Bush's IOUS will come due and will have to be paid, else millions will starve.

Note that the additional $56,000 in Bush IOUS will be collected from every middle class household --including Republicans.

I suspect that Bill Heuisler falls within that group. Hee hee.


Bill Heuisler - 10/25/2003

Mr. Williams,
No more pearls to waste.
Bill Heuisler


Don Williams - 10/24/2003

I supply factual statements that refute much stated here by
you and your allies--and I provide references to support my facts.

But addressing the facts seems to be an abyss that you would rather avoid. Instead, you seize on a trival part of my above posts and try to fashion an ad hominem out of it.

Pathetic. It illustrates that much of what is laughingly called "Republican policy" is really a matter of sucking up to the wealthy at the expense of fellow citizens --and of emotional rationalizations for that servile behavior. Are you sure that you're not Ann Coulter in drag?

A great comfort for me is that the Bush Administration has greatly screwed vast numbers of Republican middle class supporters --and those supporters are too ignorant to realize it.
But they will discover reality in about 5 years --when their
big piles of life long savings --in the form of "before tax" deposits in 401K/IRAs -- evaporate like snow in a desert. Regardless of who is elected, any post-Bush administration will have to tax those 401Ks/IRAs at very high rates --there's no other way to pay off Bush's $3 Trillion IOUs.


Bill Heuisler - 10/24/2003

Mr. Williams,
Uninformed emotional outbursts can be called tantrums, but after
struggling through your excess, disbelief finally became pity.
Your distance from reality is illustrated in one paragraph:

"One can even make an argument that the American people would have been better off if we had lost the Cold War -- it is difficult to see the difference between Russian commissars saying we owe them hundreds of $billions in tribute every year vs George W Bush telling us that we will owe a federal debt of over $9.1 Trillion in 2008."

This combination of historical and economic nonsense can only be the product of both intellectual and instructional breakdown.
You have my sincere condolences.
Bill Heuisler


Gus Moner - 10/24/2003

Mr Livingston, (no Dr Livingston, I presume), has a fancy for world conflagrations. In his view, we are now in WWIV, a rather disrespectful analisys to those who were victimised by the real WWI and II and those who paid with their lives or sacrifice to achieve victory in a real war. But that's besides his point.

I have no idea what "pacifists & cowards" all in one breath, (as if they were all the same) have to do in a deficit debate. Not telling them apart is his business, and anyway off the deficit radar.

We did not need those Voddoo Economics deficits to "defeat" the USSR. Rather, the USSR imploded from its own contradictions and its failure to invest in productive and modern equipment and technology in civilian areas. This was caused in part by the loss of oil revenue with falling prices.

It would have collapsed just the same. Eastern Europeans would have arisen against their isolation, just as they did. Do you think they started their velvet revolutions because the USA had more and better missiles or because their social systems were teetering anyhow? We merely saw the USSR off, as in bye-bye, at the railway station.

We needn't have spent that enormous capital and all the effort required to repay it on weapons never to be used. It was a complete waste of capital and investment, benefiting only the defence contractors and other pals of the right wing conservatives in power. Do not blame the Cold War for the Reagan catastrophe.

A bit of fancy, if I may, since we can argue numbers till we dehydrate.

Imagine we had made a similar sacrifice but spent the same cash educating people and breaking families out of the cycle of poverty and providing proper health care. Imagine improves schools and infrastructure been better. Even just giving the money to the poor and letting them fend for themselves, as a one-off payment to ameliorate and compensate for their historical condition, might have produced more wealth and benefit for the nation.

We’d be reaping the real benefits just about now, 20 odd years later; with millions more educated people graduating school instead of dropping out. That would mean millions of healthy and crime-free working people instead of 5 million more drop-outs per year joining the crime force instead of the workforce. We could have made real strides at energy alternatives. Heck, almost anything one could imagine would have been better that throwing that money at the military-industrial complex to fritter away.

You wouldn’t need imported software programmers and grape pickers. We would not be creating a permanent, recycling underclass that will forever require taxpayer money just to keep calamity at arm's length. On and on it goes. But no, we spent it on weapons that were never going to be fired.

This is but a dream, and all dreams must pass. Along would have come Bush 43 to pass a tax cut for the wealthy and destroy millions of jobs while turning millions into unemployed and disenfranchised citizens.


Don Williams - 10/24/2003

1)Mr Heuisler's Gilder-style supply-side economics have been shown to be garbage. Reagan tried them and came near to bankrupting the country --as shown by the economic malaise that gripped the country through out much of Bush1's term. Over time, Bill Clinton was able to reduce the federal debt from 4 times the annual tax revenue (the level in 1992 at the end of the Reagan-Bush1 reign) to 2.8 times
the annual tax collection( circa 2000).

2)Roughly 8% of the US households own over 53% of the national wealthy (as shown in Tables 2 and 3 in Federal Reserve's 2000 Survey of Consumer Finances.)

There's no reason for America's wealthy to invest in commerical enterprises that provide jobs if
George W Bush has cut the income tax rate so low that it approaches the capital gains rate.

There's no reason for the wealthy to risk their money in commerical enterprises if they can get safe returns from the huge number of Treasury bonds needed to support Bush's borrowing.
The hundreds of $billions in tax payments needed every year to pay interest on the Reagan/Bush1/Bush2 debt goes largely to the wealthy -- that interest is a tax on the middle class.

There's no reason for the wealthy to risk their money in the US when they can get greater returns from foreign investments --due to Bush driving the value of the dollar through the floor with heavy borrowing. There's no real difference between printing money by printing currency or by printing Treasury bonds.

3)Conservative pundits have lied to the country by saying the 2000 income tax cut stimulated the economy and stock market. A tax cut to the middle class or workers would have helped --but they got little. The income tax cut for the wealthy simply led the wealthy to sock the money under the mattress, as they did in 1929. Why not clip coupons for a few years and let the rabble starve?

Republicans think economics is simply a flexible way of lying -- a way to conceal their theft of money from the middle class and it's diversion to their wealthy masters.

4) Meanwhile, Bush's projections for federal debt in 2008 are $3.3 Trillion higher than what he said just two years ago.

If you look at Bush's budget submitted in Feb 2001, it showed that federal debt in 2008 would be $6.1 Trillion, with $4.8 Trillion held as Trust Fund IOUs and only $1.3 Trillion held as public debt. See Table S-16 at the bottom of
http://www.whitehouse.gov/news/usbudget/blueprint/budx.html#ts-16

If you look at the Bush budget submitted recently (Feb 2003) , it shows a 2008 federal debt of $9.4 Trillion --up $3.3 Trillion from what he stated only 2 years ago. Of that debt , $4.4 Trillion is held by the Trust Funds but public debt has now zoomed to $5 Trillion. Go to http://www.whitehouse.gov/omb/budget/fy2004/hist.html and select the Excel spreadsheet in Section 7, labelled "Table 7.1 - Federal Debt at the End of Year" and look at the 2008 figures.

Bush's recent budget doesn't show the negative effects of the $300 Billion (actually $800 billion) recent dividend tax cut --which largely goes to the rich.

When I last checked the Federal Reserve's Survey of Consumer Finances, about 8% of the households owned 53% of the national wealth. This is the result of Republican policy, not economics.
Since the Reagan election, 6% of the national wealth has shifted from the workers and poor to the wealthy

Because they own such a huge chunk of the national income and wealth, the share of the Reagan-Bush debt owed by the top 5% was about 50% or $2.8 trillion. Bush’s income tax shifted about $1 trillion of that debt from the wealthy onto the Trust Funds (Social Security, Medicare) of the workers. His own budget shows that by 2008, the Trust Funds will be holding $5 Trillion of his worthless IOUs , up from the $2 Trillion when he took office. I say worthless because the only way future governments will be able to pay off the IOUS will be to levy heavy taxes (60% +) on middle class 401Ks/IRAs.



Don Williams - 10/24/2003

Similarly, George W Bush's "War on Terrorism" is a fraud perpetuated upon the American people:

1) Even in 2000, the US defense budget was roughly $350 Billion, more than the COMBINED budgets of the next 23 largest military powers --and most of those major powers are our NATO allies.
Yet the Department of "Defense" did nothing to stop Sept 11. That's because the Department is focused on protecting the wealthy's foreign investments --and upon twisting a few foreign arms on occasion --rather than upon defending the US. The conservatives saw nothing ludicrous in adding tens of billions more to the defense budget and then spending another $40 billion/year to create and run a "Department of Homeland Security". Meanwhile, Bush had not --to my knowledge --fired any military or intelligence official and has stonewalled Congress' investigation into the Sept 11 attack.

2) Similarly, Bush has lied about what caused the Sept 11 attack:
his pandering to wealthy supporters of Israel by selling Sharon 53 more F16s after Sharon had used existing F16s to bomb Palestinians.

Israel has kicked the crap out the Palestinians for decades because Israel is the most powerful nation in the Middle East. That , in turn, is because the US has given her roughly $91 Billions in aid over the past several decades and has given/sold Israel advanced weapons systems, like the Apache helicopters and F16s, while leaving the Palestinians to be slaughtered.

3) Bush has repeatedly shot off his mouth about Iraqi "weapons of mass destruction" (a deceitful term in itself) while turning a blind eye to the 400 nuclear bombs built by Israel.

Israel was created by the US --that's why Muslims held Bush responsible for his support of Sharon's actions.

4) After Sept 11, the New York Times ran an article telling us that the Sept 11 had nothing to do the one-sided US government's one-sided support of Israel. Bill Kristol went on NBC's This Week and told us much the same.

In reality, both Israel's supporters and Bush were desperately lying to the American people -- to prevent them from noticing that Bush's pandering to Sharon had triggered the death of 3000+ citizens, $100 Billion in direct costs, and $1 Trillion in indirect costs.


5) The most casual Internet search will show that Bin Ladin gave a series of interviews to US TV networks in 1998 and that he repeatedly cited US support of Israel's attacks on the Palestinians as one of three main reasons for an Islamic Jihad against the US. See
http://www.pbs.org/wgbh/pages/frontline/shows/binladen/who/interview.html

6) In his speeches after Sept 11, Bush told America that that "we" (his administration) had "done nothing to deserve this". He stated that the attack occurred because "they hate our freedom" He also stated that he had been "secretly" working on a plan to create a Palestinian state in the weeks prior to Sept 11.

7)However, Bin Ladin indicated in an interview, published in a Pakistani newspaper called DAWN, why the Sept 11 attack occurred:

"The Sept 11 attacks were not targeted at women and children. The real targets were America's icons of military and economic power. .....The American people should remember that they pay taxes to their government, they elect their president, their government manufactures arms and gives them to Israel and Israel uses them to massacre Palestinians. "
(See http://www.dawn.com/2001/11/10/top1.htm )

8) Recall that Clinton's attempt to pressure Israel into making peace with the Palestinians was disrupted when Monica Lewinsky exposed her affair with him. An Israeli legislator, Sharon, then sabotaged the talks by going into the third most holy Islamic mosque with several hundred policemen. Sharon used the ensuring riots that he triggered to win election as Prime Minister and then hit the Palestinians hard. In spring of 2001, he even used F16s fighters bought from the US to bomb Palestinians, arousing the anger and condemmation of the world.

Bush, however, halted State Department criticism and encouraged Sharon by selling Sharon 52 more F16s in June 2001, several months before the Sept 11 attack. (See http://www.clw.org/cat/newswire/nw060601.html#State ,
http://www.clw.org/cat/newswire/nw061301.html#Rep,

9) For the June 20 , 2001 announcement of the F16 sale, go to here :
http://www.defense-aerospace.com/ , click on "Archives", select June 2001 from the list, and then search the resulting page for "Israel" or simply page down to the June 20 entries. )

10) The final approval on the sale was announced a few days before the Sept 11 attack. One reason why our intelligence received no warning of the attack was the seething anger in the Arab world over the F16 sale. See http://www.abc.net.au/worldtoday/s300179.htm and
An excerpt from http://www.iansa.org/oldsite/news/2001/sep_01/deal_israel.htm
dated September 8,2001:
" The timing the US chose to announce its decision to give Israel the dangerous F-16 jets is really strange. It seems as though the US is telling Israel "Go ahead Sharon! Carry on with the assassination of Palestinian children and the destruction of the houses of peaceful civilians! Proceed with the destruction of the Palestinian defenseless people's infrastructure and with desecrating Islamic sanctities in the holy land!"

The fact this information has been hidden from the American people-- that it has never appeared in the US news media -- shows the lengths to which Likud's supporters will go to mislead Americans.

11) Bush was pandering to Sharon because some of the largest campaign financiers of the Democratic Party are Supporters of Israel --Haim Saban , for example, alone gave the Democrats $10 million in the past two years.
See
http://www.opensecrets.org/news/pro-israel.pro-arab/index.asp , http://www.sptimes.com/2002/06/30/Columns/Jewish_voters_noticin.shtml

Bush is trying to seduce those financiers away from the Democrats
and he is pandering to these donors at the expense of the national interest.

12) Having embraced Todd Beamer's sobbing wife, Bush had no hesitation in manipulating Sept 11 to serve the Houston oil boys.

Bush administration is using the "War on Terror" as a front for building several military bases in Central Asia (see http://www.inthesetimes.com/issue/26/11/feature2.shtml )
Those bases , paid for by the US taxpayer, will allow Bush and Dick Cheney to protect Houston's billion dollar investments in the Caspian Sea oil deposits.

By the way, the oil is unlikely to come to the US. China will have a huge demand for oil in the coming decades as several billion Chinese buy automobiles -- the potential profits are huge and will be shared by a favored few.

The same applies to the Iraq oil reservoir --as soon as Bush and Karl Rove can install a puppet government.

Hey, what kind of "services" did you think Big Oil was buying from the Halliburton? Why do you think Halliburton, an "oil services" firm, hired a pudgy ex-bureaucrat with little to no experience in the oil industry --or in corporate management -- and made him a CEO? Who do you think spent much of the 1990s on the "Great Game" --trying to get Houston access to Central Asia. Who do you think served on Kazakhstan's Oil Advisory Board?

Hey, the paradigm worked in Saudi Arabia, Kuwait, and Iran -- why should Houston care is millions of Muslims live in poverty so long as they get to loot the countries with the aid of dictators installed and protected by the US government?

Bush and Cheney, after Sept 11, never stopped to ask the cost of this game on the average American. As far as they are concerned , the job of the average American is to pay the bills for their patrons' empire -- both in taxes and in blood.


Don Williams - 10/24/2003

1) Re Dave Livingston's comment over the Reagan/Bush1 debt being due to the need to defeat the evil empire --sorry, Dave. The Great Communicator really pulled the wool over your eyes"
a)While Reagan was spending 7.5 % of the US GDP on defense,Germany was only spending 3% and Japan was spending less than 1%--even though those those countries have intelligence services and are located less than a few miles from the "Evil Empire" while the US is separated by two large oceans.
b) During Robert Gates' confirmation hearing in Bush1's administration, several CIA analysts testified that CIA had known that the Soviet Union's economy was on the rocks --but that that information had been suppressed by Gates so that Reagan could con Congress into approving huge defense budgets. The US government greatly reduced it's estimate of the Soviet Union's GDP afterwards.
c) Russia still has her nuclear weapons and can still turn the US into a radioactive cinder. Reagan/Bush1 won nothing and dumped the equivalent of three years worth of tax payments onto every middle class taxpayer--federal debt soared from roughly 0.7 Trillion in 1980 to 4 Trillion by 1992.

The claim that Reagan and George W Bush gave tax cuts to the middle class is a conservative lie. As I will describe below, both of them dumped a heavy burden of debt onto the middle class
Every year, we pay hundreds of billions in interest on the Reagan/Bush1 debt --money that,if available, could be used to greatly improve the lives of many Americans.

d) One can even make an argument that the American people would have been better off if we had lost the Cold War -- it is difficult to see the difference between Russian commissars saying we owe them hundreds of $billions in tribute every year vs George W Bush telling us that we will owe a federal debt of over $9.1 Trillion in 2008.

Plus the rich patrons of the Republicans expressed their gratitude to the middle class for the Cold War "victory" by
throwing many of them out on the street. Bush1 and Cheney
threw hundreds of thousands of defense workers and military personnel onto the unemployment line even though those those workers --not Bush1 and Cheney --were the ones who fought the Cold War. One of those workers was a Gulf War combat veteran and Bronze Star winner called Timothy McVeigh.

Bush1/Cheney's actions were shortly followed by the rich's corporations --who continued the mass layoffs began in the Reagan
era. Karl Marx and Communism had arisen as a reaction to vicious excesses by the rich -- and the gains made by the US middle class in the 1950s had been largely concessions that the wealthy made to gain the loyalty and support of the middle class. With the fall of Communism,however, the robber barons returned in force.
The US wealthy discharged millions of US workers and shifted capital to build factories in low wage countries --with those foreign investments protected by the US military.






Dave Livingston - 10/24/2003

Correction. Of course, I meant to say, WWIII, the Cold War...," rather than WWII


dave Livingston - 10/24/2003

The complaint Seinhorn makes about the deficts that arose toward the end of WWII, the Cold War, on the watches of Regan & Geo. Bush the Sr.,never fail to get my goat. For starters those ewho complain ever so conveniently disregard the primary reason for those deficits: the tussle, the struggle to the death of either our way of life or that of the Oriental tyranny called the Soviet Union.

In case certain certain academics with their noses buried in the dusty back shelves of their libraries hadn't noticed, we won that forty-five year-long war to the death between our political & social systems. We won it regardless the back-stabbing efforts of parasitic pacificists and the suicidal Leftists, such as the unilateral disarmament types, here at home. Likewise, we will win WWIV, the war against militant Islamism, in spite of the back-stabbing of today's pacificists and cowards.




Gus Moner - 10/22/2003

The burdens of repayment are not all the burdens we are acquiring. The tax payment made by a $30-50,000 a year taxpayer is a harder hit that that by a millionaire. Corporations pay tax too.

People are paying. 3 million people are unemployed, millions of jobs have evaporated. The US remains the only industrialised nation without national health coverage for its citizens. Let's not even get into individual state's deficits and budget cuts.


Gregory T. Cushman - 10/22/2003

The tax foundation's own data reveals the hubris of this line of argument. Take a look at the share of Adjusted Gross Income: In 2001, the top 1% received 17% of all income, the top 50% received 86.2% of all income. Of course, the higher income brackets will pay the vast majority of taxes: they make the vast majority of the money. Half of the U.S. population SUBMITTING RETURNS divies up 14% of total income. This reflects an extreme division between rich and poor in the United States.

More troubling are the historical statistics:
In 1980, the top 1% made 8.5% of total income (AGI); the top 5% made 21%; the bottom 50% made 17.7%.
In 1987, (using a revised def. of AGI) the top 1% garnered 12.3% of total income; the top 5% 26%; and the bottom half made 16%.
By 2000, the top 1% made a whopping 20.8% of total AGI; the top 5% made 35.3%; and the bottom half made only 14%.

The tax foundations' stats reveal that the richest have become MUCH richer, their "oppressive" tax burden notwithstanding, compared to the mass of Americans since 1980. They are the overwhelming beneficiaries of our existing economic system, whether Democrats or Republicans sit in the White House. Why shouldn't they pay more taxes?


Gus Moner - 10/22/2003



Thanks for the benefit of the doubt.

..."So, either you expose pitiful naivete' or you try to insult readers. Which is it"?

The reply is neither.

Your model is "frozen"; it assumes this is a one off year. Unfortunately, every year we pile on more (last year it was around 179,000 million). My figures give the amount each person absorbed this year (2002). Call it what you want, naive or the rest. The burden is that much greater.

We just got done sacrificing plenty to pay off the Reagan-Bush 41 administrations' burden, and the Bush 43 administration comes in and "there you go again".

Or, play it again, Sam.

I guess we'll disagree. Tax cuts and deficits are not working. The economic situation is rough. We'll see what end these policies lead to, but so far, it's not how I want my economy run.


Wesley Smart - 10/22/2003

Where exactly are Mr. Jensen's facts incorrect? The top 10% don't pay that much? What evidence do you have?


John Cuepublic - 10/22/2003


Lend me 10% of your income this year, Bill Heuisler, and then 10% the next year plus interest owed on the prior loan, etc., etc., year after year. I will spend the money, the economy will boom, and your T bills will go up in value.


John Cuepublic - 10/22/2003


The rich have tax loopholes. It is the middle class that pays the income tax. Moderate income taxpayers are thus the ones which must be bamboozled by smokescreening rhetoric from Washington, in order to be persuaded to go along with such fleecing. Steinhorn's point is well-taken.


Richard Jensen - 10/22/2003

The Iraq war will be paid by the income tax--which is paid by the rich. The richest 10% of the taxpayers pay 65% of the tax. The bottom one-half pays only 4% of the tax. The poorer half of the American people also includes millions who pay no income tax. So the poorest half (140 million people) will pay under 3% of the $85 billion for Iraq--that is under $20 per person. In return their homes and schools and churches and children are protected from enemy attack. check the data out yourself at:
http://www.taxfoundation.org/prtopincometable.html


Bill Heuisler - 10/22/2003

Mr. Moner,
Your use of the words "personal cost" shows abject confusion.
Tax cuts reduce cost. Long term debt is personal convenience.
Either you know the truth and seek to deceive or you continue your misinformation because you just don't know any better. With typical charity toward a loyal fan I'll assume the latter.

In a spirit of education I'll reduce the concept to something even dogmatic Leftist Counterpunching LaRouche apostles can grasp. Compare your posted numbers and concepts to personal finances. Combine your total tax burden, house mortgage, credit card and car debt. Due now? That's a lot of money you owe.

But pretending it's all due this year is silly, isn't it?

Now subtract 20% of your tax bill and make it permanent.

Extending debt over three, five, fifteen or thirty years not only makes home and car ownership possible, but generates interest income to T-bills,investors and financial institutions. Reducing any part of that debt exponentially reduces the cost.

Trying to juxtapose long-term debt, the cost of defense against an attack on the US and a long-term tax reduction - and reducing that series of contracts and reductions to one year - is an exercise in ignorance...or propoganda aimed at the ignorant. So,
either you expose pitiful naivete' or you try to insult readers.
Which is it?
Bill Heuisler


NYGuy - 10/22/2003

Gus,

Back in the 60's Peter Grace of W. R. Grace raised similar questions about the taxpayers debt burden and the threat of disasterous economic results. Actully we have a "debt" clock on 42nd street in NYC which minute by minute updates the debt burden for each citizen. And, even thought it increase each year, we have still been able to have a prosperous economy. As a political speechwriter the author is well aware of what I am talking about even though his message is one of fear.

Meanwhile our debt burden in WWII were even larger but it helped stimulate the strong economic recovery in the post war period.

We should be concerned about our national debt and we are. But using analysis that is outside the tradition way economists view this topic can create unnessary fear. And that is what is happening here with this article.

It is GW's vision of reducing terrorism, so that we can have economic prosperity we will now be able to generate more tax revenues and take care of the perceived problems with our debt. Look at how skillfully GW has handled the economic mess he inherited from the democrats and put us back on the road to a long term recovery.

What a guy. :)


Gus Moner - 10/22/2003

This entire deficit situation and the relatively minor 87,000 million add-on for Iraq are still dancing in my head. I do not know all the numbers yet. But the math is simple.

Take the 374,000 million deficit in fiscal 2002 (we'll forgive the .2 'decimal') divided by 280,000,000 people = 1337 US Dollars per person, including prisioners, the infirm, the homeless, the retired and all children.

Then, deduct what, if anything, you got for a rebate, and presto: your "personal" cost for the war / tax rebates policies. We're not even calculating the cumulative effect of future deficits here. Just 2002. 1337 is over $110 per month per humanoid. If we reduce it to the taxpaying public, we're talking some serious money.

Sleep well Christian soldiers.


NYGuy - 10/21/2003

Cram,

Good try. The old, "everyone is out of step but my Johnny."

But that is not the point. He make a political projection but does not show how he arrived at except by pulling it out of air. There are many varables that go into predicting the budget deficit and base upon the assumptions used we can get a wide range of projections. With the economy now in a major turnaround we could have a long term upswing that will last several years and make his numbers meaningless.

There are countless people who know what is going on in the US and economy and the world, it is not the province of a select few.

Cram,

"Mr. Steinhorn is absolutely right, if people knew what the practical, long-term effect of these budget issues were, they would have responded very differently to their enactment."

Pray tell what are the long-term effect of these budget issues?

Although I know the answer, I did not find it in the article. I wonder if any one else did.


Cram - 10/21/2003

It is indisputable that Leonard Steinhorn is partisan (the article calls him "a former political speechwriter), however, I find his conclusions to be entirely accurate.

All Mr. Steinhorn is saying that the tax and budget debate in this country would change "if the politicians and news media began describing the federal deficit and debt in terms we could taste, feel and understand." He even ads that "The president is not the only politician who uses these political communication techniques. All politicians know that when you want to sell people a policy they might like, you tell them how it would affect them personally. But when you want to sell the public on a more distasteful idea, you leave the specifics as vague as possible -- the less they understand them, the better."

We are spending billions of dollars in a war while cutting taxes without drastically curbing spending while the country is running one of the largest deficits in history. Mr. Steinhorn is absolutely right, if people knew what the practical, long-term effect of these budget issues were, they would have responded very differently to their enactment.


Bill Heuisler - 10/21/2003

Oscar,
Tax cuts do not equal less revenue. Why is this so difficult?
We've had this discussion before. All major tax cuts in the past century have resulted in an increase of revenue to Government. Kennedy and Reagan cut taxes and spent more money afterward.
The dynamics are easy to follow: less tax means more money in the economy, more jobs more sales and purchases. Each becomes an added taxing point and volume more than covers the lower rates. Revenue increases geometrically while the market economy grows.
Again, this is not guesswork, it's common sense and history.
Best, Bill


NYGuy - 10/21/2003

Leonard Steinhorn

"The President obviously has no political interest in pitching his Iraq tax and deficits the same way he sold us on his tax cut plan -- showing how it affects us personally. Perhaps that's what he meant by "fuzzy math" in the 2000 presidential campaign."

NYGuy

It is interesting to note that Mr. Steinhorn is described as a political speechwriter. His political affiliation is not shown. Hmm. Did he just write for the highest bidders? I doubt it.

To present an economic view like this is suspect in my opinion since I do not know what his leanings are. But, just by reading his conclusion:

" The president obviously has no political interest in pitching his Iraq tax and deficits the same way he sold us on his tax cut plan -- showing how it affects us personally. Perhaps that's what he meant by "fuzzy math" in the 2000 presidential campaign."


it sounds to me that we are dealing with a political hack not an impartial economist. If we were searching for truth we would have had his assumptions and projections on the economy so we could make reasonable judgments about his analysis. Lacking that anything he says has to be suspect.

Actually his first four paragraphs contain no economic justification for any of his conclusions. He merely rehashs some past events creating the impression that he knows what he is talking about. I will give him credit for being a skilled political writer which is not the topic of his article.

Then in the fifth paragraph we get this statement:

"Or think about the total debt we'll accumulate during our four years under George W. Bush -- according to reliable estimates, about $2 trillion."

If he is an expert why does he not give his own estimates and projections? Picking a number out the air is not analysis and does not qualify him as an economic expert. We do learn that he can add, subtract, divide and multiply but so can many people. But, there is still no evidence of his analysis upon which he arrives at his conclusions.

After showing no knowledge of economics and forecasting, he cleverly constructs, based upon his skill as a political writer, a conclusion that we are supposed to believe.

Sorry, this does not pass the smell test. Mr. Steinhorn is just another political hack with an opinion, not an economic expert.

Based upon my economic analysis we will have a balanced budget in four years based on GW’s leadership in bringing us out of the Clinton recession and an economic expansion that will last another five years.





Suetonius - 10/20/2003

Perhaps it makes sense to pony out $300 per person now if the alternative might be $600 or $700 later. What would have been the per-person cost of an intervention in Yugoslavia in 1992 rather than in Bosnia and Kosovo years later?


Oscar Chamberlain - 10/20/2003

Bill, it is not unreasonable to bring up deficits when expenses have grown for good reasons and while tax cuts are still being implemented.

Previous major war commitments were paid for by increses in taxes as well as by deficits. The Vietnam War was not paid for that way--at least not sufficiently--and that was one factor that led to the problems of the 1970.

Some have argued that because our deficit is not as high in relation to GDP as previous deficits there is less reason to worry about it. However, that view is not shared universally, even among conservatives.

Finally, tax cuts plus increased military spending = reduced money for other services.

I realize that many conservatives see that as good, but I would remind them that Bush campaigned in 2000 by obscuring his desire to cut current social services, except perhaps in education. If he had not obscured that desire, Gore would be president.

As best as I can tell, the majority of people--rightly or wrongly--do not want to reduce most federal services or aid, particularly those programs aimed at the middle class.

Bush will not want to appear to cut those services either, not in 2004. So deficits will increase more and probably even as tax cuts increase.

I think Steinhorn's questioning that is pretty reasonable.


Bill Heuisler - 10/20/2003

Mr. Steinhorn,
Tossing numbers in the air to insult the President is pretty childish for a teacher and author. More to the point, you look foolish and partisan using terms you obviously don't understand and reaching conclusions unrelated to your imperfect facts.

1)We were attacked in 2001. We spent in response.
2)Federal debt is a product of spending over budget.
3)Federal debt is owed to Americans who draw long term interest from their investment in the strength and growth of the economy.
4)Tax cuts are mostly monies not even earned yet and will effect the economy as they phase in over the next ten years. Tax cuts also increase jobs and consumer spending, fueling the economy and making those T bills a better investment.

But you say defense spending after 9/11 is wrong, tax cuts for working Americans are wrong, but paying off the national debt is intelligent policy? Stick to writing speeches.
Bill Heuisler


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