John Snow: we will be able to fight this war and climb out of the deficit

http://www.whitehouse.gov/ask/20041007.html

Michael, from Boston writes:
The budget deficit is a huge burden on our future economy. While I am all for the tax cuts, why aren't there an equal amount of spending cuts to balance the budget? Less taxes and less government bureaucracy...Wouldn't that be better for the economy?

John Snow: Thanks for your question, Michael, you raise an important issue. The budget deficit is unwelcome, but it is understandable, and the President is taking on the essential job of its reduction. We have already seen recent progress, as our growing economy is increasing Treasury receipts. Now we need Congress to adopt the President's budget, which will cut the deficit in half over the next five years, bringing it to a historically low level in relation to Gross Domestic Product (GDP). Spending restraint is part of the President's plan, and I agree with you that spending is an equally important part of the budget deficit equation.

But at the time when we needed tax cuts to stimulate our economy, we also had the need to fight a war unlike any that had ever been fought in history: the war on terror. We are fighting an enemy that requires a much broader variety of government resources than anything we've ever confronted. And we began this fight when we were economically wounded. What's most important to remember is that we will be able to fight this war and climb out of the deficit. We can manage this deficit, and we can cut it in half over the next five years by controlling spending and growing our economy.



NOTE: I am at my "4 paragraph limit," so I encourage you to go to the URL and read the full "Ask The White House" article from today so you can experience THIS comment from Snow in its full context:

"The economy truly is in good shape, we base our statements on facts. The President's economic leadership has contributed to one of the strongest years of GDP growth in 20 years, and this growing economy has created 1.7 million new jobs over the past year. Homeownership is at an all-time high, consumer confidence is strong and even the hard-hit manufacturing sector is generating jobs. All of our underlying fundamentals are strong. Of course there is more to do - we won't be satisfied until every American who is seeking work can find a job - but if we continue to move forward with the President's pro-growth policies, there is no doubt in my mind that we will continue on this positive path and America's best economic days are ahead of us. Again, while we are encouraged by the direction the economy is going, we are still not satisfied."

:eyes:

That is a bald faced LIE. Greenspan was increasing rates because of overheated economy when first Tax Cuts were being decided upon. Bush*'s justification at that time was NOT to Stimulate the Economy but to Give Surplus monies back because we didn't need it. Not once at that time did Bush" or Snow ever mention that the economy needed stimulating, in fact the exact opposite was true.

we needed tax cuts to stimulate our economy, we also had the need to fight a war unlike any that had ever been fought in history

We DID need the kind of tax cuts that can stimulate the economy. Unfortunately what we go instead was the upper class tax cuts that tend to get diverted into overseas capital investments--which is a very innefficient way to create jobs--or go into luxury purchases, which create overseas jobs.

We are fighting an enemy that requires a much broader variety of government resources than anything we've ever confronted. And we began this fight when we were economically wounded.

The effect of 9/11 on the economy was pretty slight actually. The stock market was hurt by some capital flight, but capital flight was already in progress due to the top-margins-heavy tax cut. There was a rather mild recession going on when Bush came into office. But you grow out of a recession by stimulating jobs creation to stimulate market demands. Sadly Bush went with the corrupt and faulty supply-side stimulus that Republicans tend to favor--choosing ideology over a practical understanding of what really works.

What's most important to remember is that we will be able to fight this war and climb out of the deficit.

That's true. We will do so by dumping the loser who mismanaged the economy into its current rut.

We can manage this deficit, and we can cut it in half over the next five years by controlling spending and growing our economy.

True dat. But the economy is not the by-product of some millionaire's job-creating benevolence. The economy is the sum total of the work done by all people in the country. If you arrange for more people to be working--directly incentivize job creation--you stimulate the economy. Yes, you control the deficit in part by controlling spending. But this is a lecture on fiscal discipline from the guys who fed Halliburton a fat, unsupervised no-bid contract. In case anyone in the White House has forgotten Economics 101, monopolies result in raised prices for inferior goods. This is just as certain as the fact that electing monkeys leads to mismanagement.

Even if you are unemployed. All it will take is all the right numbers in the lottery.

Talk about rose colored glasses.

Oil prices keep going up, and are likely to continue to do so as the insurgents keep blowing up the pipelines.

The cost of the occupation keeps increasing in lives and money.

Hopefully, there won't be another terrorist strike in 'Murka, but if there is.. (I think it very likely).

etc, etc.