Bad debt - Why Bush's deficits will slow America's growth

[Yo_Mama_Been_Loggin]

By Benjamin M. Friedman, 7/27/2003

ONE AWAITS THE imminent announcement that President Bush has accused his own budget office of fuzzy math.

To recall, not quite three years ago, when Mr. Bush was running for president, the centerpiece of his platform was cutting taxes. At the time, the US government was running a sizable budget surplus. That surplus, Mr. Bush argued, belonged to the taxpayers, and they should get it back. When critics objected that a tax cut on the scale he proposed would throw the government back into the red, Mr. Bush derided their claims as ''fuzzy math'': There was plenty of room in the budget to cut taxes without risking a deficit.

One war, two terrorist attacks, and three tax cuts later-including what Mr. Bush proudly called the largest tax cut in US history-the government is solidly in deficit. On July 15, the Office of Management and Budget finally admitted what private analysts had known for quite some time: The government this year will run what will be the largest deficit in US history in absolute terms ($455 billion), and the largest as a share of our national income (4.2 percent) since 1992. Next year's deficit will be larger still. More important, the government will remain in deficit for another four years thereafter, which is as far out as the administration ventured to look. (In an Orwellian flourish, the OMB's chart revealing that the deficit would be so large, and so persistent, was titled ''Budget Deficits Cut Sharply.'')

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