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Produced & Maintained by Idaho Mountain Express, Box 1013, Ketchum, ID 83340-1013 
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Copyright © 2001 Express Publishing Inc.
All Rights reserved. Reproduction in whole or in part in any form or medium without express written permission of Express Publishing Inc. is prohibited. 


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For the week of  October 17 - 23, 2001


Wishful thinking

When George Herbert Walker Bush ran for the 1980 Republican presidential nomination, he dubbed opponent Ronald Reaganís fiscal promises "voodoo economics."

After losing the primary but becoming Reaganís vice president, Bush forever abandoned the "voodoo economics" accusation out of loyalty, although some believe that history ultimately proved him to be more correct than in error.

But, irony of ironies, Bush the Elderís son, President George W. Bush, seems mired 20 years later in "voodoo economics."


Bush the Juniorís $1.8 trillion tax cut earlier this year wiped out the nationís hefty rainy day federal surplus without noticeably lifting the economy out of its malaise. Now, as if to multiply his original error, he believes more tax cuts are the salvation, along with huge spending programs that have soared past $100 billion for emergency aid to nose-diving airlines, fighting the terrorism war, helping rebuild New York and relief for the jobless.

But thereís more: Lavish spending will be needed to eliminate the U.S. vulnerability to biological and chemical warfare; expensive new airport security measures; more billions for aiding millions of Afghanistan refugees that Bush promises not to "walk away" from; billions for Bushís exotic outer space missile defense system plus his major new spending on domestic programs.

Surely, wiping out a surplus, cutting taxes and increasing spending is not a prescription for stimulating a nationís stumbling economy.

Instead, itís a formula for crippling new deficits; for dipping into Social Security surpluses that candidate Bush vowed heíd never touch, plus federal borrowing thatíll create new debt and lead to higher inflation.

Only the foolhardy believe that the terrorism war of 2001 will resemble the economic boom inspired by World War IIís all-out defense spending. In 1944, defense accounted for 38 percent of the Gross Domestic Product; todayís defense spending will barely be 4 percent of GDP.

Mind you, Federal Reserve chairman Alan Greenspan also dreamed of manipulating the sliding economy, only to see 15 changes in the interest in 27 months (six times up, nine times down) fizzle.

President Lyndon Johnson (1963-65) unwittingly gave his White House successors a valuable, but painful, economic lessonó that Americans cannot wage a major war in Vietnam and enjoy the bounty of carefree "Great Society" spending at home.

LBJís stubborn "guns and butter" mind setódescribed in author Irving Bernsteinís 1996 book, "Guns or Butter: The Presidency of Lyndon Johnson" (Oxford University Press) as "a tragedy of epic proportions"óseems to have escaped the current brash young wishful-thinking president who seems short on U.S. history.

The Idaho Mountain Express is distributed free to residents and guests throughout the Sun Valley, Idaho resort area community. Subscribers to the Idaho Mountain Express will read these stories and others in this week's issue.