Piling Debt on Debt
Once upon a time, the Republican Party prided itself on its businesslike way of running government — namely, pinching each penny and borrowing as little as possible. For years, the GOP regularly attacked the Democrats as the party of “tax and spend.” The Democrats were spendthrifts, while the GOP was thrifty. Now, as the Bush administration winds up its sixth year in office, it appears set to establish an all-time record for unbalanced budgets and mounting debt.
This didn’t just happen to President Bush. He made it happen — because of his faulty notions about taxes and government finance.
Bush came into office on the heels of Bill Clinton, whose final budget was close to being balanced. From Bush’s first year to the present, each budget has followed the previous with a rising debt. It didn’t happen to Bush. He made it happen.
It started with a program of tax cuts for the wealthiest in the land. According to Bush, if the richest were made richer, they would use their windfalls to open businesses and employ people. If that had happened, the Bush administration would not be in its present, embarrassing position.
To make matters worse, Bush launched a hideously expensive war against Iraq and hid the cost by borrowing to pay for it. In previous wars, our government had asked Congress to levy extra taxes — sometimes even special taxes on war profiteers — to finance wars. Abraham Lincoln introduced an income tax, though he had no constitutional grounds for it. Bush did not follow his fellow Republican’s policy. Instead, he piled on more debt.
Customarily, a borrower must pay interest to the parties from whom he has borrowed. The federal government’s interest bill on its debt will come to $279 billion next year. Much of that payment goes overseas, to foreign creditors. This year, for the first time in nearly a century, America is paying more in interest to overseas creditors than it receives in foreign investment from other countries.
If Bush had not impoverished the U.S. Treasury through his tax cuts to the richest, he would not now be in the position he’s in as a borrower. But, apparently, he is not a gifted learner. Worse for him, his giveaway legislation has an expiration date. That makes Bush unhappy. So he has been pressing for legislation to extend the life of his favorite law unto eternity. Clearly, he does not know that no session of Congress has the power to enact laws that cannot be changed by subsequent Congresses. That’s another meaning of this week’s dramatic events.