List of Costs under Bush/McCain

I consider all the things you listed costs, except number 4, Luggie. The reduction in taxes means that my money and your money stayed in each of our pockets. Why is that a cost? When your taxes are lowered, it isn't like you are being given a favor. It's YOUR money. Not taking your money is no great favor. People forget this.

The insanity of the tax cuts, though, is that they came at the same time government spending was being increased. So I'd change number 4 to "running large deficits," not tax cuts. Tax cuts done the right way are a great thing. Even deficits, in and of themselves, aren't bad things when they are managed, but when there is run away spending without any plan, it's akin to maxing out your credit card on a joy ride. And in essence that is what we have been doing. And that is dumb fiscal management.

Typically tax cuts act as a stimulus for the economy. The extra money left out there is used for investment and that creates jobs. Our economy hummed along and unemployment remained low for the first part of Bush's term, but it was factors having nothing to do with his tax cuts. The intended economic stimulus of his tax cuts was not seen for two main reasons: first, there are diminishing returns from continually cutting taxes. When tax rates are exorbitant and you cut rates, it does have a strong, immediate effect on investment and consumer spending. But tax rates were not historically onerous compared to the last 30 years when Bush cut taxes so it wasn't a huge stimulus. Second, business saw all the spending on the horizon because Bush didn't mask it very well, and they took a very cautious view. So they were very conservative about new investment--waiting for a recession to hit--despite the boon from the tax cuts. This quote from Stephen Moore, who is a fiscal conservative and president of the Club for Growth pretty much sums it up: "Bush is a 'big-government' Republican, and there's no longer even the pretense that he's for smaller government." It's so true. He's all rhetoric and it's all bullshit.

The tax cuts aren't the problem if that is the case. It's the spending. Cut taxes and kill half the government, and tax cuts mean more of your money stays in your pocket and filters its way into the economy where it can spur growth. That could be a great thing.

What we have, though, is a Bush plan in which since the tax cuts, we're looking at about $3 trillion less in revenues at the same time we are spending like mad on all kinds of insane and wasteful things. It's fiscal management beyond belief. No private lender would touch a PERSON like that -- we're already fairly close to the debtor's death spiral; when borrowers get in so far over their heads that they borrow money just to cover their interest payments. They have to do this to tread water, but they have no way of paying down the principal. As the pattern plays itself out, bankruptcy becomes inevitable.

We're probably a few years -- and some economic hardship along the way -- from the point that we have to do one of two things or both: increase our tax revenues to keep our heads above water and/or drastically reduce the level of spending. This will prolong the economic hardship. Higher taxes will stagnate the economy further, and government spending is a monetary policy (often a short-sighted one) that can help spur the economy when it is stagnating. Don't count on either, because we are running out of borrowing options.

It's why anyone should be wary of two types of politicians (the only two types that exist): those promising to cut taxes and make the current levels permanent and those promising all kinds of new costly programs.

But people don't want to hear that, so the same old bullshit is passing as debate.