Not long ago, a friend asked the following unassuming question: Where did we (The United States of America) get the money to finance the war on Iraq? My friend was perplexed because it would be naIve and foolish to believe that a free lunch was a possibility. After all, it is not cheap to liberate a captive people (That is sill the reason for going into Iraq or has it changed again?).
Someone has to pay. All of the president's emphasis on tax cuts, it is doubtful that the American taxpayer or big business was going foot the bill. And it not as if our allies (formal and in spirit) will be forking over funds any time soon. Someone has to pay, but whom? Finally, it seems that the first round of invoices to begin paying for the war and the massive tax cuts are being sent out to those specially selected patriots, who were hand picked by the president himself; they are better known as the nationís poor.
According to New York Times, millions of low-income Americans face the loss of health insurance or sharp cuts in benefits, in state legislatures throughout the country. Though the cuts will increase the number of uninsured and threaten the recent gains in covering children, those officials on the front lines who must confront this dilemma directly say they have no choice. Many state officials, Democrats and Republicans alike, are desperately seeking federal assistance in order to avoid the difficult choices between the elderly and children.
In a study produced by the Center on Budget and Policy Priorities estimates as many as 1.7 million Americans could lose coverage this year. Given these possibilities I am hard pressed to understand some of the poll numbers that show as many as 62 percent of those polled feel the country is on the right track. My question: the right track for what? Anarchy? The study by the Center of Budget and Policy Priorities also suggest that the state governments aforementioned problems are not the result of irresponsible spending decisions by the states during the 1990s.
The major cause of the current state fiscal crisis is a steep drop in revenues.† State revenues have declined relative to the same quarter in the prior year for the last six quarters.† Revenues for the crucial April-June quarter of fiscal year 2002 were about 13 percent below the same period in fiscal year 2001.† The recent revenue decline was twice as steep as that seen by the states in the recession of the early 1990s. This drop in revenues resulted from a number of factors including the effects of the economic downturn and especially the decline of the stock market, the continuing effects of state tax cuts of the 1990s, the ongoing erosion of state tax bases due to their failure to adapt to the changing U.S. economy and the effect of federal tax policies. Makes one wonder as to the prudent nature of a tax cut right now? If the tax cuts of recent past help to fuel the current budget shortfalls that are forcing states to decide between the two most vulnerable segments of the population, why is the president gallivanting throughout the country trying to drum up support for another tax cut? In the spirit of Oliver Hardy, ìPresident Bush, this is another fine mess that youíve gotten us into.î
†Perhaps the problem lies elsewhere? Perhaps the potential casualties resulting from the myriad of tax cuts are necessary to the president appearing to address the countryís economic woes? Letís face it there are very few bullets in the presidents arsenal when it comes to the economy. In fact, there is just one, tax cuts. The tax cut is the Republican Partyís answer to Dr. Feelgoodís Quick Fix Elixir. Whatever it is, the tax cut will cure it. Need health coverage? What about a tax cut? Need a job? How about a tax cut? Worried about the future? No problem, how about another tax cut?
The presidentís lack of economic answers may have something do with his kicking off his 2004 campaign just before the third anniversary of September 11, 2001 tragedy with an emphasis on national security. While those close to the Bush camp suggest the president will not repeat the same reelection mistakes made by his father by appearing to be out of touch with the economic needs of the country. This explains why he is out campaigning for his massive tax cut. Not because it will address the economic needs of the country, rather the president will appear not to be out of touch. The mere fact that the president can only offer another tax cut while states are deciding whether to balance their budgets on the backs of seniors or children suggest that he is indeed out of touch.