This note is by way of background to my recent op-eds, which have been very tough on George W. Bush.
Here's why Bush's plans have me upset: our current situation is one in which, mainly through good luck - an unexpected economic boom, together with a political deadlock that has prevented both ambitious new spending plans and irresponsible tax cuts - we have managed to achieve an almost responsible fiscal policy. That is, our current situation - no wars or major military rivals, demography that is more favorable than it will be for the next couple of generations - is the sort of situation that, on any model, ought to be used to run surpluses and pay down debt. There's a good case that we aren't running surpluses as big as we ought, but at least we've moved in the right direction.
Now along comes Bush with two major proposals: a huge tax cut, which not incidentally greatly reduces the progressiveness of the tax system; and a partial privatization of Social Security that makes sense only if substantial funds are transferred over from general revenue to make up for lost contributions. These proposals are made to seem less irresponsible than they are in several ways: by relying on CBO budget forecasts that make utterly unreasonable assumptions about future spending; by not mentioning the budget implications of the Social Security proposal; and by engaging in petty dishonesty, like the fact that the cost of the Bush tax proposal is always given on a nine - let me repeat that: nine - year basis, without taking account of interest costs, and then compared with budget forecasts that are on a ten year basis. A realistic estimate may be that over the next 10 years Mr. Bush's tax cut would subtract around $1.9 billion from the budget, and that his Social Security proposal might require another $500 billion of support from general revenue. Given a realistic surplus projection, which will be in the hundreds of billions rather than the trillions - well, you get the point.
If it's a Bush administration and a Republican Congress, this will all go into effect - and then, after a couple of years, the budget truth will become apparent. The natural thing then would be to roll back the tax cut; but who are we kidding? Instead there will be years of wrangling.
A cynical interpretation of all this is that conservatives are taking advantage of a moment of irrational fiscal exuberance, when nobody is worrying about where the money will come from, to do away with as much as possible of the progressive tax system. Then when reality bites, this will be taken as a fait accompli, and anyone who tries to undo it will be accused, as Bush recently put it, of fomenting "class warfore".
But if this is warfore, who started it?