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Sunday, January 27, 2008

Years of Debt, Years of Decline

Years of Debt, Years of Decline
Image © Austin Cline
Original Poster: National Archives
Click for full-sized Image

That the economy is in trouble seems beyond doubt by this point; the only question is how bad things will get and how long they will last. People have been looking to the government for signs that the Bush administration not only recognizes the existence of a serious problem, but is able to provide assistance that will lessen the blow. This is the same administration, however, that is responsible for so many of the problems in American today.

Bush could help the economy by pulling out of Iraq — not only would this save billions of dollars in direct costs, but it would bring home troops who could return to useful, productive jobs here at home. This won't happen, though, because Bush is responsible for the lies and misinformation that got us into Iraq in the first place. The damage to the American economy through the loss of "blood and treasure" probably can't be calculated, but Bush will never admit to a need to save what's left.

Bush could back a moratorium on home foreclosures. People's inability to meet their monthly mortgage payments is a significant source of economic problems and the anxiety over possibly losing the family home is afflicting many families. Bush won't do this, however, because it would only help the working and middle classes — there are no benefits for the very wealthy.

Bush could back stricter regulation of banks to ensure that this sort of thing never happens again — the home mortgage industry is in trouble because of their own stupid loan policies. Bush won't do this and is much more likely to support a government bailout of his wealthy banking buddies so that they don't lose any of their billions. The same funds could be used to bail out home owners who are having trouble with their mortgage payments, but why would Bush help them? He's never shown much interest in that.

Bush could call for substantial tax cuts for the working and middle classes while restoring higher taxes on the rich and corporations. That would be opposed by all his wealthy friends and corporate backers, though, so we know that's not on the table. He's much more likely to insist that more tax cuts for the rich who aren't having any economic problems is the best way to help poorer people.

What about the rebate checks that Bush is supporting? It's not clear just how they are supposed to help — or whom they are supposed to help. Bush insists that the checks will help the economy because people will spend the money, but how will more retail spending help people who are struggling under crushing debt? If the people's long-term situation is to be improved, they need to put more money towards savings, investments, or debt repayment — but none of that will stimulate the economy much because the money won't be in circulation.

Even if people did do such things, the checks are probably too small to help much — mortgage and credit card debts are just too massive for a few hundred dollars to make much of a dent. Worse than that is the fact that the checks will go primarily to those making enough money that they aren't in financial trouble; those who would be most likely to spend the money immediately are those living paycheck to paycheck, but they don't pay enough taxes to get a rebate.

Bush certainly won't recommend that people do the smart thing; he wants people to keep borrowing and spending, just like the government, because this benefits his wealthy friends and corporate backers. He also won't recommend giving money to those who need it most because that's socialist wealth redistribution and he only likes tax cuts of some sort. I say, put the checks towards debt or savings even if it is just a drop in the bucket: if you spend it at the mall, then Bush and his cronies win.

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We'll try dumping haloscan and see how it works.