Bush inherited massive budget surpluses but immediately turned those into massive deficits, adding $3 trillion of new indebtedness in his first five years. This spiral of debt, driven by tax cuts for the rich, is now out of control, even as the nation stands on the threshold of its 77 million Baby Boomers retiring, needing fiscal solvency more than ever.
Poverty is up 43% since Bush took office. More than five million people have lost their health insurance under Bush. Real median income has declined five years in a row, the first time since the Great Depression. Income inequality is the highest since the 1920s. More than a quarter of all manufacturing jobs have been lost since 2000. Oil costs more than twice what it did when Bush took office. These are the symptoms, not of economic might, but of decay, even collapse.
The trade deficit has exploded to over $800 billion per year requiring the sale each year of an equal amount of American assets -- $800 billions-worth of America's assets, per year -- to settle it, i.e. pay for it. And where does the money to pay for it come from? The U.S. must borrow more than $2 billion every day to pay for this breathtaking profligacy. Even worse, it is China -- our greatest strategic adversary -- that loans us much of those sums. However, if China stops lending, the U.S. economy will utterly collapse. Never in our worst nightmares would we give our most threatening competitor such direct control over the nation's economic destiny. And, yet, that is where Bush's runaway debts have left us today.
http://www.commondreams.org/views06/0329-22.htm
Bush has relentlessly cut taxes on the rich while expanding federal spending at a rate surpassing even Lyndon Johnson's prodigious profligacy. It has allowed him to play Santa Claus but only by conscripting our children into the economic bondage of the greatest debts in history.
This tsunami of government debt has flooded the world with dollars, debauching the currency and sending the price of oil, gold, and other commodities through the roof. But the inflationary blowback has come to haunt the Bush economy, forcing the Fed to raise interest rates to throttle back economic growth.
More disquieting, Bush's debts have made the U.S. economy perilously dependent on lending from abroad. Bush has borrowed more money from foreigners than all prior presidents COMBINED. To fund his own record debts, Bush goes, hat in hand, to borrow more than $2 billion a day from the rest of the world. Only the pathologically Republican fail to understand how such indebtedness undermines America's future growth while compromising its control of its own national affairs.
Even more problematic is that foreigners have begun to have their fill of dollar-denominated debt. They are having a harder and harder time understanding how "" with the debt growing far faster than the economy itself "" the U.S. will ever pay the money back. They can only be induced to continue lending by higher and higher rates of return, which means ever higher interest rates for American business and borrowers. And of course this cycles us back, yet again, to the steady strangulation of our economy, caused by rising prices and rising interest rates.
http://www.commondreams.org/views06/0705-30.htm
More than 100% of the growth in Gross Domestic Product over the past five years is attributable to the expansion of debt. GDP is up $2.8 trillion since 2001. But government debt alone is up over $3 trillion for the same period. Add in the explosion of home mortgage debt at over $5 trillion, and a cumulative $3.5 trillion in trade deficit, and you get a Real Economy that is literally going backwards. The illusion of affluence is only sustained by selling off the family china, so to speak. Working Americans know this all too well and the reason is not hard to see: the American consumer simply doesn't have enough money to pay his bills.
Real average hourly earnings are 14% below their 1973 post-War high. Real median household incomes are still 4% below where they were in 1999. The economy has lost almost 3 million manufacturing jobs since 2001""twenty per cent of its total. Delphi Automotive, the largest automobile parts manufacturer in the world is in bankruptcy. It is demanding 60% pay cuts of its work force. Ford and GM are closing 19 plants between them and have just announced severances for 45,000 workers.
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