Last week it was announced that the Bush Administration would lave us with a $490 billion deficit for the fiscal year beginning two months from now, October 1.
But this number doesn’t include the $200 billion we’ll be filching from the Social Security Trust Fund – so it’s $690 billion. And it probably overstates the tax revenue we’ll collect – and understates the cost of the safety net benefits and various bail-outs we’ll incur – as the economy worsens. So George W. Bush, who promised a balanced budget (as John McCain does now) will leave the next President with a government running three-quarters of a trillion dollars in the red. Maybe more.
Not to harp (oh, go ahead: harp), but more than three years ago here I offered this:
Note that our accumulated National Debt since 1776 will have reached $10 trillion or so by the time President Bush leaves office – up from under one trillion when Ronald Reagan took office. Of the $10 trillion, $8 trillion or so will have been racked up under just three presidents: Ronald Reagan, George Bush, and George Bush. (Of course, with inflation, it’s natural that 21st Century deficits would dwarf 19th Century deficits. What really matters is the size of the Debt in proportion to the size of the economy – and which way that ratio is headed. The debt was about 30% of GDP when Reagan took office, will be about 75% when Bush leaves – and is headed in the wrong direction.)
Meanwhile, the ratios of consumer debt are higher also. Our homes ‘appreciate’ (even though they grow no bigger) and we borrow and spend that newfound ‘wealth.’
It may all work out fine. It generally does. But not always.
[So? So? So, as expensive as they are, I’m not selling my TIPS or my oil stocks or my PCL, all of which might be good hedges against inflation.]
☞ And guess where the National Debt is now: $9.6 trillion, right on target to hit $10 trillion, give or take a few billion, on January 20th, 2009. Just the interest on that mostly-Republican debt is equivalent to 40% of all the personal income taxes we pay, leaving that much less room to pay for anything else.
So he would make money – I hope – generating electricity from wind. That part I like. Full speed ahead.
He would enhance the value of his water holdings by using the rights-of-way under the needed wind-farm-to-cities transmission lines to bury water pipelines. That part I’m not sure is so bad – Dallas will certainly need water, and the cheaper it is to get it there, I should think, the better.
But according to this in the LA Times, the third piece of his grand plan – to use natural gas instead of gasoline to power cars – works for him because he owns a natural gas fueling station company. And that company is the sole funder of a California proposition to pump billions of dollars into subsidizing the switch to natural-gas powered vehicles. Which, the article goes on to explain, may not be such a good idea.
The last public persuasion effort Pickens funded – the Swiftboating of John Kerry – did not serve the country well, either.
Up with the windmills, down with Prop 10?
Quote of the Day
The subjects of every state ought to contribute towards the support of the government, as nearly as possible, in proportion to their respective abilities; that is, in proportion to the revenue which they respectively enjoy under the protection of the state.~Adam Smith, The Wealth Of Nations
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