Last week, Federal Reserve Chairman Alan Greenspan addressed Congress. He discussed, among other things, two important challenges facing this country: rising deficits, and the impending crisis in Social Security. Strangely enough, his policy suggestions for dealing with these two problems were the same: cut spending. He suggested reigning in spending by the federal government immediately, despite the fact that he must know very well that this will never happen.
Consider Bush's budget for Fiscal 2005. Not only does Bush propose making the 2001 and 2003 tax cuts permanent (which amounts, in budget terms, to a massive additional tax cut), he plans to cut only 0.5 percent from non-Homeland Security discretionary spending, which is not even enough to compensate for inflation. Bush's budget does call for hefty cuts in discretionary spending after 2005 (in other words, after Bush is re-elected), but there are no guarantees that cuts of such magnitude would ever make it through Congress. Center on Budget and Policy Priorities. Bush's budget is an attempt to create the appearance of fiscal responsibility on paper, without having to actually do anything that might be politically unpopular, like raising taxes or cutting spending.
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