This is a follow-on of sorts to a post I made three years ago, The Art of Fake Budgeting. Bush has released his budget for 2009, and what it amounts to is a three trillion dollar tissue of lies. They're not even trying to hide the lies anymore. Here are the most egregious phoney assumptions in the plan:
1. Gross Domestic Product (GDP) forecasts. They don't get much better than this. At a time when the word "recession" is on everyone's lips, Bush assumes a healthy 2.2% growth in GDP. This GDP prediction table says it all.
2. Alternative Minimum Tax (AMT). The Wall Street Journal writes that in Bush's budget, he assumes that the AMT--the Katrina of tax law--will continue as written (except for a one-year exemption this year). That's right: while Bush calls loudly for the AMT to be repealed, he quietly counts on the financial bonanza that would be reaped if Congress lets the AMT overrun the levees and drown the middle class. Everyone knows this would be untenable, but he needs it to extend his tax cuts for the wealthy beyond 2010. From his own document, here is Bush's assumption for federal revenue:
3. War spending. Even the ranking Republican on the Senate Budget Committee, Republican Judd Gregg (Republican, NH) says the defense numbers are, "absurd on their face." Bush's budget assumes a piddling $70 billion in funding for 2009 and nothing beyond that! Meanwhile Bush simultaneously urges Congress to pass the $105 billion supplemental funding for 2008, to bring this year's total upwards of $190 million.
4. Social Security. Continuing a long tradition of obfuscation, Bush's 2009 budget counts net income from Social Security taxes to offset the deficit. Without the net excess of funds accrued from Social Security, Bush's actual projected deficit for 2009 would be $611 billion for, not $407 billion. (You can see the figures here.) In any other accounting system, the extra $200 billion would be considered a liability, since it is supposed to be part of a trust fund owed to future payees--but in practice there is no trust fund. Congress has spent the lot.
Meanwhile, the national debt has risen to $9.21 trillion dollars, and interest paid on the debt was $430 billion last year. What a disaster.
Monday, February 04, 2008
The Art of Fake Budgeting II
Posted by Dr. Strangelove at 2:56 PM
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7 comments:
I love your post. Thanks for the great graphics!
Of course it proves that the Republicans can no longer be trusted with either foreign or domestic policy.
Terrific post! RBR is right, it shows how the Republicans have totally violated the public trust.
It also should be remarked that the federal budget is, this year more than ever, entirely a political document designed by the presiedent to set the legislative agenda and score points in the Fall elections. It wasn't just DOA - it was never seriously alive.
Thanks, guys. I should mention the graphics were cut and pasted directly from summary sheets provided on the White House website.
Bush has increased the national debt from $5.7 trillion to $9.2 trillion in seven years. We should hit nearly $10 trillion before he leaves. So much for the MBA president... He Enron-ed us.
They actually post those graphics on their own website? Either they're incredibly stupid or think we are!
I have a number of relatives who are certified public accountants. They have zero respect for the training of MBA programs. And they quietly resent that the accountants were blamed for Enron and Worldcom.
Yes, well you see the first graphic was their attempt to illustrate their prediction of economic growth is within historical norms. Which is correct. But a recession is not the norm.
The second graph was their attempt to argue that we need more tax cuts. Which we do... Except it's the AMT that needs to go.
Compare the "federal tax burden as % of GDP" versus historical GDP growth rates. Note the spikes in tax income during prosperity: the 1960s, the 1980s, the Clinton years. In no case do you see that a high tax burden is correlated with recession.
Furthermore, I think we are the least taxed industrialized democracy and we are near our 50 year low for tax burden. I can't remember where I heard that but I'm about 70% confident that's right.
In other words, we're not suffering from a terribly high tax burden either compared to similar democracies or to our own history.
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