U.S. to Suffer Argentina's Fate?
Ever since George W. Bush's government started running record budget deficits (to go along with our record trade deficits), I've been comparing the United States' current economic situation as somewhat similar to Argentina's situation in the '90s. Today, John M. Berry, a columnist for Bloomberg, wrote a column stating pretty much the same thing. While one can certainly argue that the United States is not Argentina, there can be no doubt that there are signs of clear parallel between the two countries.
Perhaps the most important parallel are the attitudes of those in government in the U.S. today and in Argentina in the '90s. Right now the U.S. is running record trade and budget deficits, borrowing abroad to finance those deficits, and the government is doing nothing to try and remedy the situation. In fact, contrary to the historical legacy of fiscal restraint in the Republican Party, Bush seems to be going out of his way to bankrupt the country. Consider this, Bush has:
- never vetoed a single spending bill in his first term in office.
- proposed additional tax cuts, to further reduce the government's revenues.
- spent countless billions on wars and other international adventures.
- done nothing to encourage U.S. saving and investment, allowing our deficit to continued to be financed by foreign investors.
- proposed huge new spending programs, such as a moon base and a manned mission to Mars.
- proposed a "personal account" scheme for Social Security, which would add $1 trillion to the national debt.
- rapidly increased Medicare spending by adding a new prescription drug benefit.
Speaking as an independent, I wonder whether anyone with an economics degree (or how about even a degree in common sense) is working at the White House? I have no love for tax and spend liberals, but at least the tax part prevents the country from going broke. The Republicans have portrayed themselves as tax cutters and bureaucracy slashers, fearlessly out to cut the size of the Federal Government. However, Bush seems to have forgot about the second part -- the bureaucracy slashing. He's great at cutting taxes, but if you don't cut spending also, you end up bankrupt.
For the sake of the country, let's hope 2008 delivers us an administration that has at least one official who learned from their mother how to budget. Maybe I should send my mom over to teach them a few things.