perfidy

Various sources report that the US budget deficit will balloon by hundreds of billions of dollars in coming years, although it is expected to not quite reach the record relative levels of the late Reagan/Bush I era. Remember how awesome the economy was back then?

*Warning: blood sugar currently low. Screed to follow*

So just how much debt is healthy? From what I can tell, the "official" Bush & co. estimates don't take into account the new perscription drug plan, millions and millions of boomer retirees, or the billyuns and billyuns of dollars it will take to build Iraq's infrastructure. In fact, Iraq money isn't even IN next year's budget.

Again, what the flipping hell? Bush isn't much of a conservative, that's for sure, and once again I begin to suspect that the eventual fiscal mess created by runaway deficit spending and even more gubmit bloat will be left for the next generation (e.g. me) to clean up. From the point of view of a dyspeptic Wednesday morning, Chim-Chim the Stunt Monkey seems like a better prospect in '04 than the current folks.

Also, in a real heartening development, economists are calling for a continuation of our "jobless recovery." Now, I'm just a stupid hick from Ohio, but please explain to me how this is particularly encouraging. A "recovery," taken empirically, means an improvement in the economy-- growth in production and revenues, etc. Obviously such a condition is positive. But the"jobless" modifier means that the job market will remain very tight despite the rising prosperity, meaning that labor will carry less value as competition for positions drives down the cost of wages. Consequently, that large class of marginal workers who live paycheck to paycheck will find it more difficult to get by. As previously noted, the minumum wage, and by extension, the poverty line, in the US is set insultingly low with respect to what it actually costs to live like an American

So the recovery benefits whom, exactly? Industry and the already economically comfortable? Those with portfolios large, diverse, and well-managed enough to take early advantage of the recovery without needing to dip savings and investments to pay the bills? Well, great. And don't give me that trickle down crap. That only applies if there's jobs around.

As for the tax cut, new research from the NBER suggests that tax cuts don't necessarily stimulate spending. Instead, extra cash in the hands of taxpayers tends to go to paying down debt and into savings rather than being spent on consumer items. At least that's what happened last time: the paper deals with the tax rebate of 2001, which was a lump sum tax advance, rather than the marginal periodic increases that the new round supposedly creates, but my Ohio Hick intuition suggests that similar principles apply now. Of course, I'm one of the Lucky Duckies who apparently didn't need a tax cut this time, so from a first-person point of view, the question is moot anyway.

Again, I'm just a stupid hick who tends to view the world in a me-me-me sort of way, but I'm hardly willing to deem the economy "recovered" until all boats rise with the tide, and hardly willing to deem Iraq "recovered" until it resembles, say, Turkey or India more than Detroit or Anacostia.

But I'm just a hick, so what do I know?

[update] Irony alert: Since consumers used their "Gub'mint play money" from 2001 to pay down debt and increase savings, they were really acting responsibly according to the conventional wisdom of home financial advisors. But this runs counter to the instructions we recieved at the time from the President, which was to "spend! spend! spend!" So which is it? Should we act for the long-term good of ourselves, and therefore ostensibly the good of the country, or for the short-term good of manufacturers and retailers, and therefore ostensibly the good of the country? I know what I did, though it was just a drop in the wide seas of my personal debt load. Thank you, music industry! I gave you three years of my life, and you gave me a net negative personal income!