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Spend, Spend and Spend Some More
Published on Monday, December 1, 2003 by the San Diego Union-Tribune
Spend, Spend and Spend Some More
by James O. Goldsborough
 

With each passing week it becomes clearer that the Bush administration's philosophy is to achieve short-term political gain at the expense of long-term national interests.

The incomprehensible Medicare bill is a perfect example of this. The energy bill would be equally good, but hasn't passed yet because too many senators are ashamed of giving goodies away quite so obviously. The Medicare bill is subtler.

If ever there was a time not to pass turkeys like this, even around Thanksgiving, this is it. Our nation faces record twin deficits of $1 trillion, and adding another $400 billion to that makes no sense other than as a transparent attempt to buy votes at the cost of long-term fiscal sanity.

"The store is open," said Sen. John McCain, R-Ariz., who has opposed both bills.

The Medicare bill is like Bush's tax bills, which helped create the twin deficits: The long-term costs of both won't be known until Bush is either gone or a lame duck.

Let's examine the Medicare turkey in the context of the twin deficits. Those deficits are roughly $500 billion each this year for the federal budget and the trade balance, and will go on rising. Two-thirds of that $1 trillion is owed to foreigners, who lately have stopped buying dollar assets, causing the dollar's decline.

The dollar's fall accelerated last week when the administration announced its plans to impose tariffs on Chinese textiles to go with its earlier imposition of steel tariffs (declared illegal by the World Trade Organization).

These tariff increases, condemned last week by Federal Reserve Chairman Alan Greenspan and likely to be met with foreign retaliation, are further examples of Bush putting short-term political gain (he needs votes from steel and textile states) ahead of long-term national interests.

Is there a political price to be paid for $1 trillion in deficits? Not in the short-term, which is why Bush has no trouble adding $400 billion in Medicare costs to the total. These costs will be paid by taxpayers in five, 10 or 20 years when Bush is long gone. We feel some of the costs in the dollar's decline, but the dollar's effect on inflation and interest rates probably won't be felt until after next year's election.

The same can be said of the Medicare bill. Seldom has a bill been passed whose consequences are so completely unforeseeable. We are accustomed to politicians making contradictory assertions and citing contradictory "facts," but with this bill it is obvious no one has a clue about ultimate effects.

If you watched the Medicare debate in the Senate, you were struck by senators asserting the bill would do precisely opposite things:

It would decrease (or increase) drug prices; it would increase (or decrease) seniors' access to drugs; it would increase (or decrease) Medicare's bargaining power with drug companies; It would encourage (or discourage) HMOs and businesses from offering (or rescinding) drug coverage.

And note that the bulk of the $400 billion goes not to Medicare to subsidize seniors' drugs, but to HMOs, who are supposed to pass it on. "Today is an historic and momentous day," declared Senate Majority Leader Bill Frist, whose family owns an HMO, the giant HCA, or Hospital Corporation of America.

For the nation, nobody knows. But it is surely a great day for the Frists.

Were this Rube Goldbergian monstrosity to take effect next year, we could judge the various "facts" against reality and reach some political conclusions. Conveniently, it doesn't take effect until 2006 when Bush either will be departed or into his last term and immune to consequences.

The Senate debate made clear nobody understood the bill's consequences. The competing "facts" created a relativism seldom seen in lawmaking.

We understand relativism in philosophy, and the post-modern movement was an attempt to show there could be no philosophical proofs at all.

But law, like science, is an area where things can be empirically verified, or so we think. The 1965 Medicare bill, a great success, stated a demonstrable fact: People over 65 are entitled to government health insurance. The 1988 Medicare bill, a great failure, also stated a demonstrable fact: Catastrophic health care would be available to all seniors with a yearly cap indexed for program costs.

Bush's Medicare bill brings deconstructionism into lawmaking. Nobody knows what it means.

At the rate the twin deficits are growing, with the Social Security crunch ever closer and with the costs of the Iraq war unforeseeable, we are in no shape to add another $400 billion to the deficit. Thinking back to the 2000 campaign and Bush's promise of a Social Security "lockbox," we can only laugh. Or cry. Bush jimmied the lockbox two years ago.

Our nation is like a person, call him Joe, living off a MasterCard whose monthly interest payments explode as his spending increases. He knows he'll never pay off the balance, and the question is how much will the mounting charges cut his standard of living.

The difference between Joe's MasterCard and Bush's is that Joe's charges won't be passed on to his children when he dies.

© Copyright 2003 Union-Tribune Publishing Co.

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