November 4, 2004
THROW THEM A BONE (WRAPPED IN POISON):
A renewed push on initiatives looms: Coming off popular election victory, supply-side leader plans bold moves (Robert Gavin, November 4, 2004, Boston Globe)
Supported by a larger Republican majority in Congress, President Bush is likely to forge ahead in his second term with efforts to cut taxes on investment, allow younger workers to invest some of their Social Security payments, expand free trade, encourage new energy exploration and production, and pursue market-based approaches to healthcare coverage, economic analysts said yesterday. [...]
Bush's proposals, economists say, reflect a supply-side philosophy that sees the key to economic growth as spurring investment, which in turn creates that capital to fuel not only business expansions, but also the emerging technologies and companies that drive job growth.
It is also a philosophy that relies on market forces, rather than government planning, to address social and economic problems.
Take Bush's key healthcare proposals, for example. Bush favors medical savings accounts that allow individuals to buy lower-cost catastrophic health insurance and to set aside, tax-free, savings for routine care that they choose.
On taxes, Bush is likely to begin by making permanent the tax cuts approved in his first term but scheduled to expire over the next few years. Valued at well over $1 trillion over 10 years, those tax cuts included controversial provisions some see as primarily benefiting the wealthy, such as deep reductions in rates for gains from stock sales and earnings from dividends.
This philosophy is largely embraced by businesses. The Dow Jones industrial average, for example, gained more 100 points following Bush's reelection victory.
Still, many economists say, the market boost could be short-lived unless Bush begins to reduce the budget deficit. If big budget deficits persist, economists say, it could mean higher interest rates, higher inflation, and slower economic growth.
One of the smartest things the Administration could do, in the spirit of bipartisanship, is ask Senator Kerry and john McCain, together with the likes of Evan Bayh, Joe Lieberman, Blanche Lincoln, Lincoln Chaffee, and Collins/Snowe, to come up with some serious spending cuts and tax loophole closures. Make them put our money where their mouths are. Posted by Orrin Judd at November 4, 2004 10:59 AM