Friday, February 1, 2008

Bush rebate plan is a ?fairy tale? adding new, unaffordable debt

Leave it to plain-talking Westerners to speak up and object to President Bush's $150 billion rebate plan to stimulate the sagging economy.

Bush's plan is a "fairy tale solution" that will drive the U.S. debt into even deeper waters, according to economist Larry Swanson, director of Montana's Center for the Rocky Mountain West.

"I don't believe the tax rebates will do much to solve our economic problems because we live in a time of spiraling deficits, spiraling foreign trade deficits and historically high fuel prices."

Since President Bush took office, he has increased the national debt from $5.7 trillion to $9 trillion—and counting.

Washington is paying $400 billion a year in interest on money Bush has borrowed. And the war in Iraq is adding $10 billion a month to the debt.

"Now with a 50 percent chance of recession over the next year, we propose to do more spending cuts and more deficit spending," Swanson said. "That's how we got where we are."

Prudent spending still hasn't taken hold: Congress heaped on itself a pay raise Jan. 1 without any fanfare—from $165,200 per year to $169,300.

A clash on the rebates is developing between President Bush and Montana Democrat Sen. Max Baucus, chair of the Senate Finance Committee. Baucus is championing rebates for senior citizens. "My proposal will give America's seniors the same rebate as any wage earner."

However, the United States can't continue on this revolving door of bailouts and rebates. National debt is not only intolerable, but our borrowing from foreign governments puts us in the position of a beggar. Our ability to maintain influence over lender governments is drastically diminished, even compromised.

Pouring billions of dollars into Iraq also has diminishing returns.

Sen. John McCain has not inspired confidence that he plans to reduce the reckless spending in Iraq. His answer during a debate, perhaps more flip than thought out: U.S. troops might be in Iraq for 100 years.

If the U.S. economy is so fragile that it must rely on huge foreign borrowing, how can a costly, ongoing war be justified?

Painful realities lie ahead for the next president. He or she must level with Americans—the "free lunch" Washington dispenses periodically in bailouts and rebates must come to an end.

The most beneficial and long-overdue domestic program of investment would be $1.6 trillion over five years to repair the crumbling U.S. infrastructure of bridges, dams, roads and highways, schools, and waste disposal plants.

Triggering a massive national construction program will do more to stir economic recovery than rebates.

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