To: Zoltan! who wrote (132157 ) 3/16/2001 9:56:27 AM From: Tunica Albuginea Read Replies (1) | Respond to WallSt. Jour: Robert Rubin Hoover Robert Hoover antipathy for President Bush's tax cut is turning Democrats into Herbert Hoover Republicans. "Debt," especially government debt, was one of those economic abstractions that preoccupied Republicans and other accountants. But so desperate are they to defeat Mr. Bush that, despite a sinking stock market and a flat economy, Democrats are now elevating debt reduction to be America's foremost economic goal. Robert Rubin put it late last month on PBS's "NewsHour with Jim Lehrer": "At the present time it seems to me that which is best for the American people is to pay down the debt, because, remember, the debt is also the debt of the American people." Pay down the debt! by ranking Budget Committee Democrat Kent Conrad. We hear Mr. Conrad is begging Mr. Rubin to testify, the better to lure the TV networks. The other Democratic star witness is likely to be Gary Gensler, former debt management guru under Bill Clinton. At the very least, Mr. Rubin needs to go to school on the facts of U.S. debt. debt is already falling fast, to about $3.2 trillion by the end of this year. That's about 34% of GDP, down from more than 50% only a few years ago and about the average among industrial nations. Every Social Security tax dollar not spent on current benefits will "pay down" this debt even further, even under the Bush tax plan. This is in essence what the Rubin-Gensler Democrats are advocating: Of those foreigners, 27% are Japanese, We can't "afford" a tax cut today, they insist, because we need to build up assets to pay Social Security benefits in 2030. But where does Mr. Rubin want to put those assets? In a mattress? As Fed Chairman Alan Greenspan has noted, it is dangerous for the government to build up a surplus because the political temptation will be great to start buying up huge chunks of the private economy. Mr. Rubin opposes private Social Security accounts, so the only alternative under his strategy would be for the government to gobble up private industry. Perhaps this is indeed what the Democratic Party wishes to do. It may be of course that these facts don't matter, because Democrats in Congress aren't arguing in good faith. They're just obsessing over debt reduction because they know it is the best line of political attack to stop a tax cut. But the Robert Rubin who was Treasury Secretary was better than that. Now he's being brought back as a cog in someone else's political offensive.interactive.wsj.com
