Eliot Sherman: The method to this fiscal madness rears its ugly head

You really have to wonder when the Bush Administration's stalwart belief in tax cuts as the blanket solution to any and every economic problem goes from being mildly amusing to utterly terrifying. But since I watched this administration give up on fiscal sanity a long time ago, I am not so much surprised as disgusted by this, our latest round of tax cuts.

More than anything else, it's a matter of timing. Why now? Why after a record-breaking tax cut broke the bank in 2001, turning a surplus into a deficit and shrinking paychecks as well as costing jobs for millions of Americans as the economy tanked? Why after a costly war and an even costlier proposed rebuilding process? Why is more never enough?

After all, the classic definition of insanity is doing the same thing twice and expecting different results. If that saying is correct, then it stands to reason that our honorable public servants have gone a little crazy.

Crazy? Yes. But crazy like a fox.

This tax cut thoroughly exemplifies the Bush Administration and everything it has done up to this point. It combines sheer political brilliance with some of the most unethical and morally bankrupt policies that this country has ever seen, born of a personal ideology that exists slightly to the right of Attila the Hun.

On the surface, it is an economic gamble, albeit one where the potential short-term benefits are vastly outweighed by the assured long-term consequences. According to the Washington Post, David Wyss, the chief economist at Standard & Poor's, estimated that the cut would add about a percentage point of economic growth.

Hopefully his estimate will be correct, but it is far from guaranteed. What is guaranteed, however, is that this tax cut will send the deficit skyrocketing to record levels, with absolutely no exit plan. Eventually, it is certain that the government's need to borrow money to deal with the deficit and to pay for the tax cut's provisions will begin to conflict with the private sector's requirements for cash to invest.

But it is the effects that will occur beneath the surface that truly lend this tax cut to a moral vacuum of monumental proportions, although it is quite politically ingenious. While the national budget is experiencing a tidy 400-some billion dollar deficit for the next decade, Democrats, especially whichever fattened lamb wins the primary, will be forced to make some politically painful choices. They will have to recognize that there will be no room in the budget for new health care or social security initiatives or make that most politically unpopular of stands and call for a rise in taxes.

Those of us with a healthy dose of paranoia look at these projected results and wonder if a tax cut that has a good chance of forcing social programs that Republicans have abhorred for decades out of the budget might not have been an accidental occurrence. After all, what's the point of a social safety net? We should all get off our lazy butts and inherit wealth, like good Americans.

By all accounts, there will be a judgment day of sorts in about 15 years, and the tough decisions will fall to us. Roger Altman, former deputy secretary of the treasury: "Our children, not our great grandchildren, will face [the] music. They will have to choose either to increase taxes by unimaginably huge amounts to keep benefits flowing or to cut the benefits off and watch the elderly become the poverty class. Would you want that choice?"

Altman goes on to say that much of these undesirable outcomes could be averted by simply returning the highest tax bracket to a rate of 39.6 percent, as it was under Clinton. That's a difference of 4.6 percent a year to those making more than $400,000. Here, it seems, we have the reason that the upper echelons of the Republican Party truly loathed Clinton, and the reason that they adore Bush.

During his tenure, President Clinton managed to balance the budget for the first time in 50 years. Economic prosperity ensued, as jobs were created and investment confidence was generally high. Going back to those days could be as simple as asking the super-rich to bear a slightly bigger burden. Is asking that really "class warfare", as Republican leadership would have us think?

Regardless, one thing is for sure: the Republicans aren't about to ask, and neither will Democrats, barring a party-wide spine-installation operation. As a result, we are left with fiscal insanity at an unparalleled level, just so the privileged members of the Grand Old Party can party on unchecked, at great cost to the rest of us. Welcome to the new order.

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