Economy
BIG MONEY The Reality Behind the Ailing Economy CAREY HANLIN
A
merica is struggling. According to the be blamed for economic downturn, and ton’s administration was poised to begin CIA World Fact Book, we rank 169th in there isn’t a single idea that will work erasing the national debt which, at the GDP growth rate but 6th in obesity, 1st to fix it. All that is obvious today is that time, approximated $5.6 trillion. Data in in imports but 3rd in exports. 15.1% of we have two presidential candidates a report published by the Congressional our population lives below the poverty who have vastly different economic poli- Budget Office suggests that Clinton-era line. As a percentage of GDP, we rank cies. Whether one candidate will help budget policies (PAYGO) and taxes on 23rd in military expenditures but only the economy flourish while the other the upper class would eventually have 44th in education expenditures. We will ruin it completely is doubtful. But led to a budget surplus of approximately have the highest incarceration rate in our past can tell us what works and $5.6 trillion dollars by 2011, effectively the world, and we spend more than what doesn’t, what booms the economy paying off the entire US debt. twice as much per prisoner than we do and what ultimately dooms it. But when President Bush assumed per student. And on top of all of that, office, policy changed. One of Bush’s we are the world’s leading consumer in A Growing Deficit planks during his 2000 campaign was cocaine, Columbian heroin, and Mexican In 1990, George H. W. Bush enacted that federal surpluses were better off marijuana. the “Pay As You Go” (or PAYGO) policy returned to the people in the form of And now we’re broke. We have a na- as part of his Budget Enforcement Act tax cuts, rather than remaining with the tional debt climbing toward $16 trillion, of 1990. According to the policy, gov- federal government where the money and more than 8% of us are out of a ernment spending and tax cuts had to could be spent by congress. In 2001, job. Gas prices are high and stock mar- be offset by tax hikes or reductions in the senate passed President Bush’s $1.3 ket confidence is low. And it’s obvious spending. In simpler terms, if the gov- trillion plan to lower taxes by 3-5% for to any savvy republican that all incomes. Previously, such President Obama is to blame a hefty tax cut would have At the end of his presidency, Bill for it all, just as it’s obvious Clinton’s administration was poised to been offset by spending cuts, to any savvy democrat that but when PAYGO officially exerase the national debt... President Bush actually bears pired in 2002, the republicanthe weight. Because we all controlled Congress did not need to believe in one single source of ernment wanted to use money, it had renew it and even admitted that Bush’s our economic misfortunes, in the hope to use money that was already avail- Medicare extension plan, which was esthat impeachments and repeals can re- able. With its tighter control over gov- timated at the time to cost over $400 verse all that has been done and put us ernment spending, PAYGO ultimately billion, would fail to meet PAYGO stanon top once more. played a large role in the subsequent dards. But the economy is not that sim- Clinton-era surplus. But as the unfinanced tax cuts and ple. There isn’t a single person that can At the end of his presidency, Bill Clin- Medicare extensions dug a financial
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