The Administration acted with deliberate speed to begin its fiscal program, which revolves around tax cuts. It is unfortunate that they are phased in over so long a period. You may disagree with the policy, but you cannot honestly say that they ignored the economy.
As for the policy itself, Bush said that we were in danger of a recession, and touted tax cuts as a stimulus. That is sound policy, in fact. Any stimulus would involve either rebating the surplus, or spending it, and non- directed consumer spending is preferable. Now, there is some dispute over whether a stimulus is required, of course, since we seem to be pulling out of recession. But a low- tax environment is generally preferable, even apart from a stimulus. Once one totals all taxes, federal, state, and local, the tax burden is about 50% for most taxpayers. This is an enormous amount of diverted income, and a drag on the economy. As the cost of government becomes exorbitant, there is less to spend on other things, and the consumer economy suffers.
As far as military spending goes, I have stated my view that it is a way of satisfying the anxieties of the services before engaging in a more thorough review of strategy and means. Besides, we are in the middle of serious military action, so a review can legitimately be deferred.
On the matter of deficits, as I have said, the issue is not debt, but our ability to carry it. We are in no imminent danger of bankruptcy, and therefore should not let spookiness about deficits get in the way of otherwise sound policy........ |
