King, your name isn't Elliot by any chance? (Jagged Alliance 2 reference)
Laugh at Bush, laugh at France
- Thread starter Paladin Solo
- Start date
No, it's Apollo87. (DAC reference)
Buh? The government going bankrupt? Not likely! The government is basically constantly refinancing debt. Since it always pays its loans by taking out others, it actually has really good credit. Debt may be more of an issue at the state level, but considering the thrends toward increased federal power and responsibility that's becomming a lot less relevant. At the very least, the federal government can act as a source of loans for the state and local governments.
Government debt is actually pretty normal, though. Not because there's more to spend than there is to collect, although that may be true, but because the government has to act as a stabilizing factor in the economy. If you tried to force the government to balance the budget every year, you'd see a pretty dramatic increases in the severity of the business cycle. The best overall policy is what's known as cyclical balancing of the budget: The government runs a deficit during recessionary periods and a surplus during expansionary periods. The name is misleading, though, as in reality it still would not balance.
Regardless of your political beliefs, smaller government vs larger government, debt is probably going to happen, and it's far from the end of the world in either situation.
Government debt is actually pretty normal, though. Not because there's more to spend than there is to collect, although that may be true, but because the government has to act as a stabilizing factor in the economy. If you tried to force the government to balance the budget every year, you'd see a pretty dramatic increases in the severity of the business cycle. The best overall policy is what's known as cyclical balancing of the budget: The government runs a deficit during recessionary periods and a surplus during expansionary periods. The name is misleading, though, as in reality it still would not balance.
Regardless of your political beliefs, smaller government vs larger government, debt is probably going to happen, and it's far from the end of the world in either situation.
welsh
Junkmaster
Ok, I see the confusion- What I was referring to primarily was the problem of the states not the federal government. A quick look around at the states reveals that most of the states are in financial trouble. California's financial troubles were what led to the recent recall and Virginia has a similar problem. Much of this has to do with the federal government placing new burdens on the state without providing revenue, but also the trend towards reduced taxes to local governments. I know that Virginia is currently worried about its credit rating, and that depends on the state's ability to pay its debts. The credit rating will affect the ability and terms by which a government can borrow.
But unfortunately a government can't always borrow just like the government can't create currency to cover its debts. In another thread, I think begun by Ozrat over a year ago on how much the government was spending, I went back through the numbers to show that perhaps the greatest amount of spending from the federal government was on paying off its debts, and this from money from taxes that could have been spent on reinvestments in the economy. Where did these debts come from? Years of deficit spending.
Thus the problem of deficit spending- the long term effects of borrowing to sustain revenues during lean years can retard growth during surplus years.
In fact, a look to other economies indicates this problem. Many countries have failed to pay debts or been forced to roll over deficits. This has been devestating in developing economies. But even powerful developed economies have faced debt crises and relied on foreingn borrowing to get by. Historically we can look at the cases of France and Spain, powerful empires, that bankrupted themselves. But even major powers have suffered this. Many countries had large debts following the second world war. But also the US has suffered of this recently. During the 1980s the US often received substantial funds from foreign governments to maintain revenue flows. The US has also had to utilized its Standard Drawing Rights in order to maintain its high credit.
Indeed, deficit spending is a regular problem, as is extensive borrowing during lean years. In this way the government is supposed to act as the lender of last resort. In fact, if one takes a more globalized view, the power of a world leader (or a hegemon) often comes with it performing the job of "lender of last resort". This is one of the reasons why the World Bank/IMF system was created, and why Japan's support for Southeast Asian economies during the recent 1997 Asian Financial Crisis was a mark of it taking a greater leadership role in the region.
But again, one cannot imagine that there is no limit to borrowing. Just like a child that borrows from a parent, at some point there has to come an end, and unlike a child, the borrowing comes with a price. The money that a country borrows must come from somewhere, and the credit rating, its ability to pay its debts, shapes the future pattern of its ability to borrow.
Thus the issue- one can have good debt or bad debt. Good debt, just like a credit card, depends on your ability to make payments in a timely fashion. That you should have to borrow is fairly normal. But the more difficult it is to pay, the more trouble you face in the long term. There are only two ways to acquire that money- borrowing or taxes- in either case someone has to eventually pay.
But the point raised earlier- (1) that states (like Virginia and California and others) were becoming bankrupt), and
(2) that current generations will pay for this, and
(3) that the current rate of debt is hurting the US, is still valid.
I think is pretty valid.
You're argument about the cycle of debt and all that jazz is intrinsically accurate Welsh, IMO.
My nitpick is saying that the government cannot just print more money. Fact is it -can-, it is just a very bad thing. The US -could- pay off all its debts tomorrow if it wanted to by printing enough money to cover it all. But (obviously) a cycle not unlike interwar Germany would develop, the international financial system would collapse and Depression would set in.
So the US -could- print more money, having the legal right to do so. The question becomes a question of ethical and moral right.
One of many things I see as a problem with the current administration is the lack of fiscal reality, let alone responsibility. YOU and I, (not to mention our children's children) will be paying for Cheney's concessions to the ultra-wealthy. Some debt is good, but I cannot see how the current rate of spending can be maintained, and will ultimately result in huge problems, right about the time that Social Security goes belly up...
My nitpick is saying that the government cannot just print more money. Fact is it -can-, it is just a very bad thing. The US -could- pay off all its debts tomorrow if it wanted to by printing enough money to cover it all. But (obviously) a cycle not unlike interwar Germany would develop, the international financial system would collapse and Depression would set in.
So the US -could- print more money, having the legal right to do so. The question becomes a question of ethical and moral right.
One of many things I see as a problem with the current administration is the lack of fiscal reality, let alone responsibility. YOU and I, (not to mention our children's children) will be paying for Cheney's concessions to the ultra-wealthy. Some debt is good, but I cannot see how the current rate of spending can be maintained, and will ultimately result in huge problems, right about the time that Social Security goes belly up...
welsh
Junkmaster
I tend to see this policy as a bit deceptive and perhaps playing on the notion that people are a bit short sighted. Chances are, I think, that Bush will win the next election, and while the economy may improve, the consequences of the debts might not be felt until the next election (in a sense much like how Bush Sr adopted the fiscal problems left over from the Reagan administration). Since that election is as yet unknown, there's a fair chance the tough decision to raise taxes will be made by Democrats- which further defines the Democrats as pro-tax adn the Republicans as anti-tax. While it might be a clever ploy to create long term problems that burden your political opponents when they take over, I can't think it's healthy for the country and can back-fire. Bush Sr. was quite good in foreign policy but lost because of the economy.
But to be fair, it is possible that if the economy heats up, the growth in the economy might allow for an increase in taxable revenue at a lower rate that the government is actually able to pay off its debts, or at least the debt becomes a smaller fraction of the GNP. That is the game plan it seems. Restimulate economic growth, allowing for a more larger economy.
More simply, in a sense the government is saying that if we tax less, we take a smaller share of the economy in taxes. WHat is left over can go to restimulate the economy. If the economy grows larger, with a smaller relative share of that economy spent in taxes, the economy becomes large enough that we get more money, in absolute numbers, than we had before.
There is reason to believe this is a good idea. THe US is a big and vibrant economy. Even in times of relative hardship, the US economy still performs quite well.
This is what makes the US distinct from the cases I mentioned above. The national debt is usually a very small percentage of the overall GNP, which makes it distinct from most foreign countries or even the historical cases mentioned above.
But here's the rub. Much of international money politics has moved beyond the power of sovereign states but rests in private lenders. If 1997, George Soros can be blamed for the Asian Financial Crisis by his plays with the Malaysian currency, than, if to a lesser extent, international and private investors can effect the US. Because a lot of the decision on this is in private hands, the system is therefore much more competitive and more skittish.
Private, mostly institutional, lenders invest in bonds as a secure investment vehicle. But they will go to those economies that are more secure and shy from those that are not. When Clinton decided that he would use budget surpluses to par down the debt, this was a signal that the US was taking its debt seriously and trying to reduce it. That's like you saying that you want to pay off more on your credit card debt that you have to- it gives creditors greater confidence that you will be able to pay it off. That increases your credit rating.
But if the country begins to take more debt, than there are two consequences- (1) someone has to pay this off- which eventually comes to tax payers. (2) Creditors may become more skeptical. Skeptical creditors may take their money elsewhere.
That is the problem. Is the US taking on too much debt, to fast? Because the US government still has to provide services that the citizens expect, they have to make up those tax deficits with revenue. More money gobbled by the government means less available to private borrowers, it also means that private lenders have to count on that economy growing or the debts might not be repaid, but the government may take on more debt to pay those loans. THis is what creates the problems.
But to be fair, it is possible that if the economy heats up, the growth in the economy might allow for an increase in taxable revenue at a lower rate that the government is actually able to pay off its debts, or at least the debt becomes a smaller fraction of the GNP. That is the game plan it seems. Restimulate economic growth, allowing for a more larger economy.
More simply, in a sense the government is saying that if we tax less, we take a smaller share of the economy in taxes. WHat is left over can go to restimulate the economy. If the economy grows larger, with a smaller relative share of that economy spent in taxes, the economy becomes large enough that we get more money, in absolute numbers, than we had before.
There is reason to believe this is a good idea. THe US is a big and vibrant economy. Even in times of relative hardship, the US economy still performs quite well.
This is what makes the US distinct from the cases I mentioned above. The national debt is usually a very small percentage of the overall GNP, which makes it distinct from most foreign countries or even the historical cases mentioned above.
But here's the rub. Much of international money politics has moved beyond the power of sovereign states but rests in private lenders. If 1997, George Soros can be blamed for the Asian Financial Crisis by his plays with the Malaysian currency, than, if to a lesser extent, international and private investors can effect the US. Because a lot of the decision on this is in private hands, the system is therefore much more competitive and more skittish.
Private, mostly institutional, lenders invest in bonds as a secure investment vehicle. But they will go to those economies that are more secure and shy from those that are not. When Clinton decided that he would use budget surpluses to par down the debt, this was a signal that the US was taking its debt seriously and trying to reduce it. That's like you saying that you want to pay off more on your credit card debt that you have to- it gives creditors greater confidence that you will be able to pay it off. That increases your credit rating.
But if the country begins to take more debt, than there are two consequences- (1) someone has to pay this off- which eventually comes to tax payers. (2) Creditors may become more skeptical. Skeptical creditors may take their money elsewhere.
That is the problem. Is the US taking on too much debt, to fast? Because the US government still has to provide services that the citizens expect, they have to make up those tax deficits with revenue. More money gobbled by the government means less available to private borrowers, it also means that private lenders have to count on that economy growing or the debts might not be repaid, but the government may take on more debt to pay those loans. THis is what creates the problems.
Paladin Solo
So Old I'm Losing Radiation Signs
Ozrat, since I am new and young, and some would argue, and idiot, please explain what "Apollo87" means. Is it supposed to be an insult? If so, why? Last I checked, Apollo was the name of an ancient Greek god of the Sun, and the class name given to the ships that went the the moon and orbited it or landed on it. So how exactly did this name become an insult, if that's what you are implying? And I know you told me this before, but please refresh my memory, what exactly is "DAC" again?
What's your background Welsh? Economics? Impressive in any case.
There is also the school of thought that taxes are in essence a check to economic overheating. You should raise taxes to reduce the money supply when inflation is a problem and lower them when deflation is a worry. As it turns out this is what our c-average Princeton MBA in the white house is doing, so he is following theoretical ideas.
Problem is that the concept only works on paper, not in the real world. When the economy stagnates and taxes should be lowered is exactly the same time when taxes need to be raised in order to keep revenue levels constant, since economic growth is tied directly to revenue. The only way that Bush's strategy would work is if the tax revenue does not change relative to economic conditions. Since this fact is something that only exists in Fantasy Land, the Bush administration's fiscal policy (or lack thereof) is fundamentally flawed.
The only alternative that may rescue this thinking is to change government spending in direct relation to revenue. But as we all know, oil markets dictated that a war with Iraq was necessary, political markets dictated that a tax cut for the rich was necessary, and underlying all of this is the fact that most of the government revenue is already spoken for, and cannot be cut without defauting on loans or stopping social security payments. Which leaves the little things like the environment and welfare as the only place to cut.
You didn't address my point about the money supply Welsh, you seem to be in the know and am curious what you think.
There is also the school of thought that taxes are in essence a check to economic overheating. You should raise taxes to reduce the money supply when inflation is a problem and lower them when deflation is a worry. As it turns out this is what our c-average Princeton MBA in the white house is doing, so he is following theoretical ideas.
Problem is that the concept only works on paper, not in the real world. When the economy stagnates and taxes should be lowered is exactly the same time when taxes need to be raised in order to keep revenue levels constant, since economic growth is tied directly to revenue. The only way that Bush's strategy would work is if the tax revenue does not change relative to economic conditions. Since this fact is something that only exists in Fantasy Land, the Bush administration's fiscal policy (or lack thereof) is fundamentally flawed.
The only alternative that may rescue this thinking is to change government spending in direct relation to revenue. But as we all know, oil markets dictated that a war with Iraq was necessary, political markets dictated that a tax cut for the rich was necessary, and underlying all of this is the fact that most of the government revenue is already spoken for, and cannot be cut without defauting on loans or stopping social security payments. Which leaves the little things like the environment and welfare as the only place to cut.
You didn't address my point about the money supply Welsh, you seem to be in the know and am curious what you think.
welsh
Junkmaster
Murdoch said:
Actually law and politics. But lately I have been doing political economy of development, so I need to work on my IPE and basic monetary policy materials. Within these disciplines the role of taxes and the state, and the effect of globalization and the growth or decay of the state is regularly the topic of interest. But thanks.
What are you working on.
Pretty good discussion on the role of taxes and the effects, and pretty right on too, in my opinion. This last part is especially interesting. During the Reagan years you had the Japanese and other creditor nations- England, the Netherlands, lending money that was needed. I am not sure how likely we are to find such countries with revenue to spare this time around. That makes the US dependent on private and institutional lenders, and thus more subject to market fluctuations.
You mean the idea of printing money? Well I think that its more than a moral and ethical problem. Yes, you are right. Legally they could print up more money. The consequence would be to devalue the dollar.
But that's the problem- on a system of floating currencies- in which the US dollar is valued based on its competition with other currencies and not by a gold standard, the real value of the dollar depends on how the economy is doing. If you print up too much money the value of the currency becomes worthless. After all, it's just paper.
It's that system of reasonableness in monetary policy that underlies the faith in the currency. Countries have tried to out perform debt by printing up more money or even playing with the currency's value. This is a very dangerous game to play however because you run the risk of undermining confidence in the value of your dollar.
It has been the dependability of the US dollar, and the economy behind it, that made the US such an attractive market for foriegn investment in the past. If you take the opportunity to devalue your currency because it's politically expedient to do so- well you undermine confidence, and in economics- the game is long-term planning and predictability. If you undermine confidence you undermine the economy itself.
welsh
Junkmaster
Looking for anti-bush reading?
Here's some reviews-
Attacking the White House
Oh George
Dec 30th 2003
From The Economist print edition
A litany of books lay into the leader of the free world
“NO ONE likes us. We don't care.” Thus goes the chant of Millwall, an unloved-and-proud-of-it British football club. It could also be the anthem of the current White House. Not since Richard Nixon has an administration rejoiced so much in being loathed by its opponents. The Clintons used to fret about “a vast right-wing conspiracy”. George Bush's attitude, whether the foe is Gerhard Schröder or the one American in five who is happy to be called liberal, is a smirk and a curt “Don't mess with Texas.”
The fact that a president who promised to bring a new tone to Washington has actually polarised his country may prove a sensible electoral gamble on his part: the Bush lovers probably narrowly outnumber the Bush haters. But it is playing blue murder with political books.
Overt hatred was once rather unseemly in the literary world. Now it sells books by the shelf-load. Heading into Christmas, the first three books on the New York Times bestseller list were “Dude, Where's My Country?” by Michael Moore, the clown prince of Bushophobia, “Lies and the Lying Liars Who Tell Them”, a leftish rant by Al Franken, and then an angry conservative rejoinder, “Who's Looking Out For You?” by Bill O' Reilly of Fox News. Just below them sits another hefty seller—“Bushwhacked” by two Texan detractors, Molly Ivins and Lou Dubose.
The Bush bashers are quick to point out that the conservatives began this fight—by unleashing a succession of jeremiads against the Clintons, accusing the first couple of everything from murder to overseeing “The Death of Outrage”, to use the title of William Bennett's bestseller. Since Mr Clinton left the White House, the right has found new enemies from “the left-wing media” to faint-hearted Europeans. Producing a snarling “liberals-eat-your-children” book seems to be part of the job description for Fox News presenters.
Yet Bush hatred arguably now exceeds even Clinton hatred in its scope. It has become a genre with endless sub-genres: for instance if you want to pursue Mr Franken's interest in fibs, you can go to “Big Lies” by Joe Conason or “The Lies of George W. Bush” by David Corn.
More important, Bush hatred is multinational. Clintophobia largely stopped at America's borders. But Bush loathing has picked up a strong anti-American tailwind, one that the loathers are not unafraid to exploit. The cover for the American edition of Paul Krugman's collection of anti-Bush essays, “The Great Unravelling”, is fairly restrained; the British cover is a grotesque lobotomised image of the president and vice-president which would horrify readers of Mr Krugman's column in the New York Times.
As a commercial phenomenon, Bush hatred is rather interesting. But sooner or later, you have to look at the content—and this is depressing, particularly if you read more than one book. Most of the anti-Bush books are fairly lazy affairs, endlessly repeating the same old stories. Just as you could feel Whitewater looming a few pages away in a Clintophobe book, you know when the Bush baiters are about to mention Arbusto—Mr Bush's first failed oil company—and what they will say.
There are bright spots. “Bushwhacked”, the pick of the bunch, has some original research and is written with the same biting Texan twang that Governor Ann Richards used to great effect against George Bush senior. Mr Franken is often genuinely funny: for instance, he writes to conservative advocates of abstinence education, asking them to send stories of their own heroism in this regard for an inspirational book for young people called “Savin' It!” (“Don't be afraid”, he urges the likes of Mr Bush and John Ashcroft, “to share a moment when you were tempted to have sex, but were able to overcome your urges through willpower and strength of character.”) By contrast, Mr Moore's satiric skills seem to have decreased in direct proportion to his fame: the wit of “Roger & Me”, which skewered General Motors, has given way to “Woo Hoo! I Got Me a Tax Cut!”
However, the real problem with the Bush-hating books is their lack of proportion. “Bushwhacked” nails Mr Bush's oil career as an open-and-shut case of crony capitalism, but then adopts the same tone of outrage with Mr Bush's generally well-meaning education bill. “The Bush Hater's Handbook”, assembled by a Canadian who changed nationality to vote against the president, compares Mr Bush's “compassionate conservatism” slogan with “Arbeit macht frei” from Auschwitz, though it concludes they are “not on a par”.
How sad then to include in all this “American Dynasty”. Sad, because the author, Kevin Phillips, has a good record as a political pundit, stretching back to “The Emerging Republican Majority” in 1969; sad, too, because he has amassed a lot of material on Mr Bush's forebears—a great grandfather who was a war-profiteering robber baron, a grandfather with links to both Nazi Germany and the early CIA, a father who exaggerated the extent to which he struck out for oil in Texas by himself.
Written as a narrative, this could have made a decent yarn. Instead, Mr Phillips uses the Bush family to illustrate a host of pet historical and cultural theories, including his personal take on Britain's 17th-century restoration in which Mr Bush is compared, oddly, to Charles II.
It is not just that the story ricochets backwards and forwards at a dizzying rate; the historical analogies are all over the place. Fair enough, today's Protestant fundamentalists are a little like Oliver Cromwell's Ironsides (“who knew more about the geography of the Holy Land than about the English terrain two counties away”). But it is very odd to jump from the Plantagenet kings to invading Iraq; or from the House of Karadjordjevic to America's “aristophilia in the 1980s and 1990s”.
The author admits that he had planned to write a more conventional book about dynastic politics, but then his “unhappiness” with the president and his family took over. So why are so many people unhappy with Mr Bush? Could it have something to do with the Millwall attitude? Mr Clinton seemed to be stuck in an argument with his detractors. Mr Bush simply does not care. In fact, he actually seems to revel in the idea that some people don't like him—and that gets up people's noses.
Dude, Where's My Country?
By Michael Moore.
Warner Books; 272 pages; $24.95
Penguin/Allen Lane; £17.99
Lies and the Lying Liars Who Tell Them: A Fair and Balanced Look at the Right.
By Al Franken.
Penguin/Dutton; 400 pages; $24.95
Penguin/Allen Lane; £12
Bushwhacked: Life in George W. Bush's America.
By Molly Ivins and Lou Dubose.
Random House; 347 pages; $24.95
Allison & Busby; £7.99
The Bush-Hater's Handbook: A Guide to the Most Appalling Presidency of the Past 100 Years.
By Jack Huberman.
Nation Books; 337 pages; $13.95
American Dynasty: Aristocracy, Fortune, and the Politics of Deceit in the House of Bush.
By Kevin Phillips.
Viking; 384 pages; $25.95
Here's some reviews-
Attacking the White House
Oh George
Dec 30th 2003
From The Economist print edition
A litany of books lay into the leader of the free world
“NO ONE likes us. We don't care.” Thus goes the chant of Millwall, an unloved-and-proud-of-it British football club. It could also be the anthem of the current White House. Not since Richard Nixon has an administration rejoiced so much in being loathed by its opponents. The Clintons used to fret about “a vast right-wing conspiracy”. George Bush's attitude, whether the foe is Gerhard Schröder or the one American in five who is happy to be called liberal, is a smirk and a curt “Don't mess with Texas.”
The fact that a president who promised to bring a new tone to Washington has actually polarised his country may prove a sensible electoral gamble on his part: the Bush lovers probably narrowly outnumber the Bush haters. But it is playing blue murder with political books.
Overt hatred was once rather unseemly in the literary world. Now it sells books by the shelf-load. Heading into Christmas, the first three books on the New York Times bestseller list were “Dude, Where's My Country?” by Michael Moore, the clown prince of Bushophobia, “Lies and the Lying Liars Who Tell Them”, a leftish rant by Al Franken, and then an angry conservative rejoinder, “Who's Looking Out For You?” by Bill O' Reilly of Fox News. Just below them sits another hefty seller—“Bushwhacked” by two Texan detractors, Molly Ivins and Lou Dubose.
The Bush bashers are quick to point out that the conservatives began this fight—by unleashing a succession of jeremiads against the Clintons, accusing the first couple of everything from murder to overseeing “The Death of Outrage”, to use the title of William Bennett's bestseller. Since Mr Clinton left the White House, the right has found new enemies from “the left-wing media” to faint-hearted Europeans. Producing a snarling “liberals-eat-your-children” book seems to be part of the job description for Fox News presenters.
Yet Bush hatred arguably now exceeds even Clinton hatred in its scope. It has become a genre with endless sub-genres: for instance if you want to pursue Mr Franken's interest in fibs, you can go to “Big Lies” by Joe Conason or “The Lies of George W. Bush” by David Corn.
More important, Bush hatred is multinational. Clintophobia largely stopped at America's borders. But Bush loathing has picked up a strong anti-American tailwind, one that the loathers are not unafraid to exploit. The cover for the American edition of Paul Krugman's collection of anti-Bush essays, “The Great Unravelling”, is fairly restrained; the British cover is a grotesque lobotomised image of the president and vice-president which would horrify readers of Mr Krugman's column in the New York Times.
As a commercial phenomenon, Bush hatred is rather interesting. But sooner or later, you have to look at the content—and this is depressing, particularly if you read more than one book. Most of the anti-Bush books are fairly lazy affairs, endlessly repeating the same old stories. Just as you could feel Whitewater looming a few pages away in a Clintophobe book, you know when the Bush baiters are about to mention Arbusto—Mr Bush's first failed oil company—and what they will say.
There are bright spots. “Bushwhacked”, the pick of the bunch, has some original research and is written with the same biting Texan twang that Governor Ann Richards used to great effect against George Bush senior. Mr Franken is often genuinely funny: for instance, he writes to conservative advocates of abstinence education, asking them to send stories of their own heroism in this regard for an inspirational book for young people called “Savin' It!” (“Don't be afraid”, he urges the likes of Mr Bush and John Ashcroft, “to share a moment when you were tempted to have sex, but were able to overcome your urges through willpower and strength of character.”) By contrast, Mr Moore's satiric skills seem to have decreased in direct proportion to his fame: the wit of “Roger & Me”, which skewered General Motors, has given way to “Woo Hoo! I Got Me a Tax Cut!”
However, the real problem with the Bush-hating books is their lack of proportion. “Bushwhacked” nails Mr Bush's oil career as an open-and-shut case of crony capitalism, but then adopts the same tone of outrage with Mr Bush's generally well-meaning education bill. “The Bush Hater's Handbook”, assembled by a Canadian who changed nationality to vote against the president, compares Mr Bush's “compassionate conservatism” slogan with “Arbeit macht frei” from Auschwitz, though it concludes they are “not on a par”.
How sad then to include in all this “American Dynasty”. Sad, because the author, Kevin Phillips, has a good record as a political pundit, stretching back to “The Emerging Republican Majority” in 1969; sad, too, because he has amassed a lot of material on Mr Bush's forebears—a great grandfather who was a war-profiteering robber baron, a grandfather with links to both Nazi Germany and the early CIA, a father who exaggerated the extent to which he struck out for oil in Texas by himself.
Written as a narrative, this could have made a decent yarn. Instead, Mr Phillips uses the Bush family to illustrate a host of pet historical and cultural theories, including his personal take on Britain's 17th-century restoration in which Mr Bush is compared, oddly, to Charles II.
It is not just that the story ricochets backwards and forwards at a dizzying rate; the historical analogies are all over the place. Fair enough, today's Protestant fundamentalists are a little like Oliver Cromwell's Ironsides (“who knew more about the geography of the Holy Land than about the English terrain two counties away”). But it is very odd to jump from the Plantagenet kings to invading Iraq; or from the House of Karadjordjevic to America's “aristophilia in the 1980s and 1990s”.
The author admits that he had planned to write a more conventional book about dynastic politics, but then his “unhappiness” with the president and his family took over. So why are so many people unhappy with Mr Bush? Could it have something to do with the Millwall attitude? Mr Clinton seemed to be stuck in an argument with his detractors. Mr Bush simply does not care. In fact, he actually seems to revel in the idea that some people don't like him—and that gets up people's noses.
Dude, Where's My Country?
By Michael Moore.
Warner Books; 272 pages; $24.95
Penguin/Allen Lane; £17.99
Lies and the Lying Liars Who Tell Them: A Fair and Balanced Look at the Right.
By Al Franken.
Penguin/Dutton; 400 pages; $24.95
Penguin/Allen Lane; £12
Bushwhacked: Life in George W. Bush's America.
By Molly Ivins and Lou Dubose.
Random House; 347 pages; $24.95
Allison & Busby; £7.99
The Bush-Hater's Handbook: A Guide to the Most Appalling Presidency of the Past 100 Years.
By Jack Huberman.
Nation Books; 337 pages; $13.95
American Dynasty: Aristocracy, Fortune, and the Politics of Deceit in the House of Bush.
By Kevin Phillips.
Viking; 384 pages; $25.95
welsh
Junkmaster
And who says that Bush's debt is a good thing
January 8, 2004
I.M.F. Says U.S. Debts Threaten World Economy
By ELIZABETH BECKER
and EDMUND L. ANDREWS
ASHINGTON, Jan. 7 — With its rising budget deficit and ballooning trade imbalance, the United States is running up a foreign debt of such record-breaking proportions that it threatens the financial stability of the global economy, according to a report released Wednesday by the International Monetary Fund.
Prepared by a team of I.M.F. economists, the report sounded a loud alarm about the shaky fiscal foundation of the United States, questioning the wisdom of the Bush administration's tax cuts and warning that large budget deficits pose "significant risks" not just for the United States but for the rest of the world.
The report warns that the United States' net financial obligations to the rest of the world could be equal to 40 percent of its total economy within a few years — "an unprecedented level of external debt for a large industrial country," according to the fund, that could play havoc with the value of the dollar and international exchange rates.
The danger, according to the report, is that the United States' voracious appetite for borrowing could push up global interest rates and thus slow global investment and economic growth.
"Higher borrowing costs abroad would mean that the adverse effects of U.S. fiscal deficits would spill over into global investment and output," the report said.
White House officials dismissed the report as alarmist, saying that President Bush has already vowed to reduce the budget deficit by half over the next five years. The deficit reached $374 billion last year, a record in dollar terms but not as a share of the total economy, and it is expected to exceed $400 billion this year.
But many international economists said they were pleased that the report raised the issue.
"The I.M.F. is right," said C. Fred Bergsten, director of the Institute for International Economics in Washington. "If those twin deficits — of the federal budget and the trade deficit — continue to grow you are increasing the risk of a day of reckoning when things can get pretty nasty."
Administration officials have made it clear they are not alarmed about the United States' burgeoning external debt or the declining value of the dollar, which has lost more than one-quarter of its value against the euro in the last 18 months and which hit new lows earlier this week.
"Without those tax cuts I do not believe the downturn would have been one of the shortest and shallowest in U.S. history," said John B. Taylor, under secretary of the Treasury for international affairs.
Though the International Monetary Fund has criticized the United States on its budget and trade deficits repeatedly in the last few years, this report was unusually lengthy and pointed. And the I.M.F. went to lengths to publicize the report and seemed intent on getting American attention.
"I think it's encouraging that these are issues that are now at play in the presidential campaign that's just now getting under way," said Charles Collyns, deputy director of the I.M.F.'s Western Hemisphere department. "We're trying to contribute to persuade the climate of public opinion that this is an important issue that has to be dealt with, and political capital will need to be expended."
The I.M.F. has often been accused of being an adjunct of the United States, its largest shareholder.
But in the report, fund economists warned that the long-term fiscal outlook was far grimmer, predicting that underfunding for Social Security and Medicare will lead to shortages as high as $47 trillion over the next 70 years or nearly 500 percent of the current gross domestic product in the coming decades.
Some outside economists remain sanguine, noting that the United States is hardly the only country to run big budget deficits and that the nation's underlying economic conditions continue to be robust.
"Is the U.S. fiscal position unique? Probably not," said Kermit L. Schoenholtz, chief economist at Citigroup Global Markets. Japan's budget deficit is much higher than that of the United States, Mr. Schoenholtz said, and those of Germany and France are climbing rapidly.
In a paper presented last weekend, Robert E. Rubin, the former secretary of the Treasury, said that the federal budget was "on an unsustainable path" and that the "scale of the nation's projected budgetary imbalance is now so large that the risk of severe adverse consequences must be taken very seriously, although it is impossible to predict when such consequences may occur."
Other economists said they were afraid that this was a replay of the 1980's when the United States went from the world's largest creditor nation to its biggest debtor nation following tax cuts and a large military build-up under President Ronald Reagan.
John Vail, senior strategist for Mizuho Securities USA, said the I.M.F. report reflected the concerns of many foreign investors.
"I would say they reflect the majority of international opinion about the United States," he said. And he added, "The currency doesn't have the safe-haven status that it has had in recent years."
Many economists predict that the dollar will continue to decline for some time, and that the declining dollar will help lift American industry by making American products cheaper in countries with strengthening currencies.
"In the short term, it is probably helping the United States," said Robert D. Hormats, vice chairman of Goldman Sachs International.
Fund officials and most economists agreed that the short-term impact of deficit spending has helped pull the economy through a succession of crisis. And unlike Argentina and other developing nations that suffered through debt crises, the United States remains a magnet for foreign investment.
Treasury Secretary John W. Snow did not address the fund's report directly. But in a speech to the United States Chamber of Commerce on Wednesday, he said Mr. Bush's tax cuts were central to spurring growth and reiterated the administration's pledge to reduce the deficit in half within five years.
"The deficit's important," Mr. Snow said. "It's going to be addressed. We're going to cut it in half. You're going to see the administration committed to it. But we need that growth in the economy. We had an obligation to the American work force and the American businesses to get the economy on a stronger path. We've done it and we have time to deal with the deficit."
But the report said that even if the administration succeeded it would not be enough to address the long-term problems posed by retiring baby boomers.
Moreover, the fund economists said that the administration's tax cuts could eventually lower United States productivity and the budget deficits could raise interest rates by as much as one percentage point in the industrialized world.
"An abrupt weakening of investor sentiments vis-à-vis the dollar could possibly lead to adverse consequences both domestically and abroad," the report said.
January 8, 2004
I.M.F. Says U.S. Debts Threaten World Economy
By ELIZABETH BECKER
and EDMUND L. ANDREWS
ASHINGTON, Jan. 7 — With its rising budget deficit and ballooning trade imbalance, the United States is running up a foreign debt of such record-breaking proportions that it threatens the financial stability of the global economy, according to a report released Wednesday by the International Monetary Fund.
Prepared by a team of I.M.F. economists, the report sounded a loud alarm about the shaky fiscal foundation of the United States, questioning the wisdom of the Bush administration's tax cuts and warning that large budget deficits pose "significant risks" not just for the United States but for the rest of the world.
The report warns that the United States' net financial obligations to the rest of the world could be equal to 40 percent of its total economy within a few years — "an unprecedented level of external debt for a large industrial country," according to the fund, that could play havoc with the value of the dollar and international exchange rates.
The danger, according to the report, is that the United States' voracious appetite for borrowing could push up global interest rates and thus slow global investment and economic growth.
"Higher borrowing costs abroad would mean that the adverse effects of U.S. fiscal deficits would spill over into global investment and output," the report said.
White House officials dismissed the report as alarmist, saying that President Bush has already vowed to reduce the budget deficit by half over the next five years. The deficit reached $374 billion last year, a record in dollar terms but not as a share of the total economy, and it is expected to exceed $400 billion this year.
But many international economists said they were pleased that the report raised the issue.
"The I.M.F. is right," said C. Fred Bergsten, director of the Institute for International Economics in Washington. "If those twin deficits — of the federal budget and the trade deficit — continue to grow you are increasing the risk of a day of reckoning when things can get pretty nasty."
Administration officials have made it clear they are not alarmed about the United States' burgeoning external debt or the declining value of the dollar, which has lost more than one-quarter of its value against the euro in the last 18 months and which hit new lows earlier this week.
"Without those tax cuts I do not believe the downturn would have been one of the shortest and shallowest in U.S. history," said John B. Taylor, under secretary of the Treasury for international affairs.
Though the International Monetary Fund has criticized the United States on its budget and trade deficits repeatedly in the last few years, this report was unusually lengthy and pointed. And the I.M.F. went to lengths to publicize the report and seemed intent on getting American attention.
"I think it's encouraging that these are issues that are now at play in the presidential campaign that's just now getting under way," said Charles Collyns, deputy director of the I.M.F.'s Western Hemisphere department. "We're trying to contribute to persuade the climate of public opinion that this is an important issue that has to be dealt with, and political capital will need to be expended."
The I.M.F. has often been accused of being an adjunct of the United States, its largest shareholder.
But in the report, fund economists warned that the long-term fiscal outlook was far grimmer, predicting that underfunding for Social Security and Medicare will lead to shortages as high as $47 trillion over the next 70 years or nearly 500 percent of the current gross domestic product in the coming decades.
Some outside economists remain sanguine, noting that the United States is hardly the only country to run big budget deficits and that the nation's underlying economic conditions continue to be robust.
"Is the U.S. fiscal position unique? Probably not," said Kermit L. Schoenholtz, chief economist at Citigroup Global Markets. Japan's budget deficit is much higher than that of the United States, Mr. Schoenholtz said, and those of Germany and France are climbing rapidly.
In a paper presented last weekend, Robert E. Rubin, the former secretary of the Treasury, said that the federal budget was "on an unsustainable path" and that the "scale of the nation's projected budgetary imbalance is now so large that the risk of severe adverse consequences must be taken very seriously, although it is impossible to predict when such consequences may occur."
Other economists said they were afraid that this was a replay of the 1980's when the United States went from the world's largest creditor nation to its biggest debtor nation following tax cuts and a large military build-up under President Ronald Reagan.
John Vail, senior strategist for Mizuho Securities USA, said the I.M.F. report reflected the concerns of many foreign investors.
"I would say they reflect the majority of international opinion about the United States," he said. And he added, "The currency doesn't have the safe-haven status that it has had in recent years."
Many economists predict that the dollar will continue to decline for some time, and that the declining dollar will help lift American industry by making American products cheaper in countries with strengthening currencies.
"In the short term, it is probably helping the United States," said Robert D. Hormats, vice chairman of Goldman Sachs International.
Fund officials and most economists agreed that the short-term impact of deficit spending has helped pull the economy through a succession of crisis. And unlike Argentina and other developing nations that suffered through debt crises, the United States remains a magnet for foreign investment.
Treasury Secretary John W. Snow did not address the fund's report directly. But in a speech to the United States Chamber of Commerce on Wednesday, he said Mr. Bush's tax cuts were central to spurring growth and reiterated the administration's pledge to reduce the deficit in half within five years.
"The deficit's important," Mr. Snow said. "It's going to be addressed. We're going to cut it in half. You're going to see the administration committed to it. But we need that growth in the economy. We had an obligation to the American work force and the American businesses to get the economy on a stronger path. We've done it and we have time to deal with the deficit."
But the report said that even if the administration succeeded it would not be enough to address the long-term problems posed by retiring baby boomers.
Moreover, the fund economists said that the administration's tax cuts could eventually lower United States productivity and the budget deficits could raise interest rates by as much as one percentage point in the industrialized world.
"An abrupt weakening of investor sentiments vis-à-vis the dollar could possibly lead to adverse consequences both domestically and abroad," the report said.