Jun 12, 2003 | On May 28, in a ceremony in the East Room of the White House, President Bush signed into law the Jobs and Growth Tax Relief Reconciliation Act of 2003, the second major tax-cut bill of his presidency. The plan, which carries an official 10-year price tag of $350 billion but is likely to cost several times as much, has come under heavy criticism from Democrats and some Republicans, but as he signed the bill Bush insisted it would revive the U.S. economy.
The mechanism, as he outlined it, seems simple: The new tax cuts, Bush said, will let Americans keep more of "your own money." And "when people have more money, they can spend it on goods and services. And in our society, when they demand an additional good or a service, somebody will produce the good or a service. And when somebody produces that good or a service, it means somebody is more likely to be able to find a job."
As the United States' economic doldrums continue, evaluating whether Bush's tax cuts make sense becomes an increasingly pressing task. The Dow may be rising, but employment is continuing to fall. Deflation is possible. The dollar is weakening. Local and state governments are beset by their own deficits, while the federal debt is ballooning at an astounding rate -- on Tuesday, the Congressional Budget Office warned that the federal government is headed for a record $400 billion deficit in 2003. And, perhaps most critically, there is a massive financial crisis looming on the horizon: the budget bomb caused by huge Social Security and Medicare benefits that will be paid out to retiring baby boomers beginning in 2008.
The White House says that supply-side tax cuts will cure all of our economy's problems, but a look at the record of such cuts in the Reagan years suggests just the opposite. Indeed, to many observers, a relentlessly executed program of tax cuts seems designed to accelerate a Social Security catastrophe, not avoid it.
The plot to kill Social Security - Salon.com
The mechanism, as he outlined it, seems simple: The new tax cuts, Bush said, will let Americans keep more of "your own money." And "when people have more money, they can spend it on goods and services. And in our society, when they demand an additional good or a service, somebody will produce the good or a service. And when somebody produces that good or a service, it means somebody is more likely to be able to find a job."
As the United States' economic doldrums continue, evaluating whether Bush's tax cuts make sense becomes an increasingly pressing task. The Dow may be rising, but employment is continuing to fall. Deflation is possible. The dollar is weakening. Local and state governments are beset by their own deficits, while the federal debt is ballooning at an astounding rate -- on Tuesday, the Congressional Budget Office warned that the federal government is headed for a record $400 billion deficit in 2003. And, perhaps most critically, there is a massive financial crisis looming on the horizon: the budget bomb caused by huge Social Security and Medicare benefits that will be paid out to retiring baby boomers beginning in 2008.
The White House says that supply-side tax cuts will cure all of our economy's problems, but a look at the record of such cuts in the Reagan years suggests just the opposite. Indeed, to many observers, a relentlessly executed program of tax cuts seems designed to accelerate a Social Security catastrophe, not avoid it.
The plot to kill Social Security - Salon.com
