W.’s Voodoo Economics
Pierre Tristam/Candide's Notebooks, October 11, 2006
You have to admire the man. He had the audacity, this president of ours, between discussions of possibly 650,000 Iraqis killed since his invasion, North Korea setting off an atomic bomb, recycled lies about the federal budget deficit and a House Republican acting like a Catholic priest unbound, he had the audacity, in his news conference from the Rose Garden, to joke about three reporters’ wardrobes (“If I might say, that is a beautiful suit,” “First best dressed person here,” “That’s not even a suit”), about “high-priced news guys,” “NPR Man” and “Washington Post Man” (because that’s what journalists are to him: Ken and Barbie dolls smashable in front of an audience), and to manage to blame the staggering rise in violence in Iraq on Ramadan (“A rise in violence has occurred every Ramadan period in the last three years”). Obnoxious diversions, but necessary, if the man is going to have something to hide behind.
What attention this rote news conference will draw will be on his emasculated stand about North Korea (compared with his this-will-not-stand positions regarding Iraq during his axis-of-evil days). So let’s focus instead on his more domestic lie—his announcement of cutting the deficit in half three years ahead of schedule, a claim deserving its own Nobel in voodoo economics (a prize his father would appreciate). It’s the kind of magician’s trick that nails how the Bush junta goes about turning red into black and blood into wine. Well, non-alcoholic punch rather, since we’re dealing with reformed alcoholics and unreformed evangelicals.
The deficit for 2006 came in at $248 billion which, the White House says in 18 th-century-like capitalized words, “Surpasses By $12 Billion President Bush's Original Goal Of Cutting The Deficit In Half By FY2009 From Its FY2004 Projected Peak Of $521 Billion.” Projected peak. You see, Bush is a Wall Street kind of guy. On Wall Street, the new vogue for corporations looking for every trick to deceive investors is to project a bleak future and “surprise” investors when the real, slightly more promising figures come in, even if the difference is marginal. Investors like good surprises. So do voters. In February 2004, the White House projected that $521 billion deficit, knowing that the actual deficit wouldn’t be that high by the time the real figures clocked in that September. In fact, the year’s deficit came it at $412 billion. But Bush’s promise to “cut the deficit in half” was based on that bogus $521 billion. Today, he cashed in. If he was to compare deficit to deficit, he’d have missed the mark by $42 billion.
Still not bad, you say? Maybe not. But even the “actual” deficit is not the actual deficit—and certainly not the $248 billion Bush referred to. The deficit the White House cites is artificially lowered by the billions of dollars the federal government is swiping from the Social Security surplus. In 2004, the official deficit was $412 billion, but only because the calculation took in the $155 billion surplus taken in by Social Security. That money will have to be paid regardless. It is literally being borrowed from Peter to pay Paul, or in this case, George W. Pinocchio. Absent Social Security’s bail-out money, the deficit in 2004 was $568 billion.
Social Security keeps generating bigger and bigger surpluses every year (why do you think Bush and his Republican bandits keep salivating over that stash, which they want diverted to the stock market?). The official deficit, paradoxically, keeps decreasing, as it’s devouring those larger amounts to hide its true cost. Bush is claiming that his tax cuts created the “strong” economy and lowered the deficit. But Social Security alone took in $22 billion more in 2005, compared with 2004, jacking up its surplus from $151 billion to $174 billion — all diverted into Bush’s deficit-reduction scheme. The very program he wants to destroy, in other words, is the program bailing his ass out. So in 2005 the officially reported deficit was $318 billion; the actual deficit, without Social Security’s play money, was $494 billion. Expect this year’s alleged $248 billion deficit to come in somewhere closer to $415 billion. (And don't forget that this is the same White House that projected, in December 2002, that the cost of the Iraq war would be somewhere around $50 billion to $60 billion, after firing the economic adviser who'd put the figure closer to $200 billion. Projections are not this White House's strengths.)
And these are the good years. The Baby Boomers are beginning to waddle off payrolls and onto Social Security and Medicare’s ledgers. The surpluses, like oil, won’t last forever, although the wars in the Mideast at this rate just may. Bush will be long gone by the time the real deficits hit the books. But what does he care. What matters is the spin—today, now. And how his wardrobe jokes go over with the press corps, which was too happy to go along today. It never occurred to anyone in the Rose Garden to ask the emperor if his clothes were real.