A Form of Looting: The Bushit 7.2% economic growth "recovery"

[TruthIsAll]

http://www.informationclearinghouse.info/article4292.htm

A Form Of Looting"

Der Spiegel, Interviews George A. Akerlof, co-winner of the Nobel Prize in economic sciences.

SPIEGEL ONLINE: Professor Akerlof, according to recent official projections, the US federal deficit will reach $455 billion this fiscal year. That's the largest ever in dollar terms, but according to the President's budget director, it's still manageable. Do you agree?

George A. Akerlof: In the long term, a deficit of this magnitude is not manageable. We are moving into the period when, beginning around 2010, baby boomers are going to be retiring. That is going to put a severe strain on services like Medicare, Medicaid and Social Security. This is the time when we should be saving.

snip

SPIEGEL ONLINE: And secondly, you disagree with giving tax relief primarily to wealthier Americans. The GOP argues that those people deserve it for working hard.

Akerlof: The rich don't need the money and are a lot less likely to spend it - they will primarily increase their savings. Remember that wealthier families have done extremely well in the US in the past twenty years, whereas poorer ones have done quite badly. So the redistributive effects of this administration's tax policy are going in the exactly wrong direction. The worst and most indefensible of those cuts are those in dividend taxation - this overwhelmingly helps very wealthy people.

SPIEGEL ONLINE: The President claims that dividend tax reform supports the stock market - and helps the economy as a whole to grow.

Akerlof: That's totally unrealistic. Standard formulas from growth models suggest that that effect will be extremely small. In fact, the Congressional Budget Office (CBO) has come to a similar conclusion. So, even a sympathetic treatment finds that this argument is simply not correct.

snip

SPIEGEL ONLINE: So the government's just bad at doing the correct math?

Akerlof: There is a systematic reason. The government is not really telling the truth to the American people. Past administrations from the time of Alexander Hamilton have on the average run responsible budgetary policies. What we have here is a form of looting.

SPIEGEL ONLINE: If so, why's the President still popular?

Akerlof: For some reason the American people does not yet recognize the dire consequences of our government budgets. It's my hope that voters are going to see how irresponsible this policy is and are going to respond in 2004 and we're going to see a reversal.

SPIEGEL ONLINE: What if that doesn't happen?

Akerlof: Future generations and even people in ten years are going to face massive public deficits and huge government debt. Then we have a choice. We can be like a very poor country with problems of threatening bankruptcy. Or we're going to have to cut back seriously on Medicare and Social Security. So the money that is going overwhelmingly to the wealthy is going to be paid by cutting services for the elderly. And people depend on those. It's only among the richest 40 percent that you begin to get households who have sizeable fractions of their own retirement income.

snip

Der Spiegel, Interviews George A. Akerlof, an economics professor at the University of California, Berkeley, who was named the 2001 co-winner of the Nobel Prize in economic sciences.

[shoopnyc123]

1. Exactly...

Paul Krugman in his book says the same thing....

[newyawker99]

4. Hi shoopnyc123!!

Welcome to DU!! :toast:

[unblock]

2. 7.2% increase in looting

the gdp measures the TOTAL dollar of production, regardless of its origin or distribution. rich people pilfering the treasury and looting iraq increases the gdp.

once again, the bushies make a few people richer and then claim that the "average" is richer even if the vast majority are worse off....

[StClone]

3. My take on why now

Why over the past ten years, or more, has the Money Grubbers gone berserk to get get as much as they can as fast as they can.

I think they are looking down the pipe at the huge demands that will come as the baby boomers retire. They say "not my money to support a society retiring boomers." They see chaos and doom coming and as usual their reaction is fear.

Their goal is to rip as much as they can and hide it and live well while the great USA withers away. Little do they know this is suicide for them and death for the goose that lays the golden eggs.