Economy is safe — at least through ’08
It’s hard to believe that only a decade ago many Democrats were considered economic centrists. The party was largely behind free trade and against policies that hindered growth.
Contrast that with today’s populist rhetoric and the tax-and-spend platforms of Democrats seeking the party’s 2008 nomination for president. When partisans gather in Denver a year from now for their national convention, they might well dump their donkey as mascot in favor of a drunken sailor being nursed by a nanny.
Democrats from all corners of the country have suggested raising income taxes, raising capital gains taxes, raising cigarette and cigar taxes, raising gasoline taxes, raising taxes on oil and natural gas companies and raising corporate taxes. The party line: punish success, discourage investment and make energy unaffordable, then blow the loot on socialized medicine for the middle class, bailouts for homeowners who’ve missed mortgage payments and massive expansions of federal bureaucracies.
Their sympathizers within the Washington press corps and punditry have breathlessly reported every detail of the economic insanity with nary a dissenting perspective. It’s been enough to make fiscal conservatives dig survival bunkers in their back yards.
On Thursday, President Bush offered a voice of reason before taking a few weeks of summer leave from the White House. In a wide-ranging news conference, the Republican made it clear that majority Democrats aren’t likely to get his signature on any tax hikes, big-ticket purchases or new welfare schemes.
He dismissed a proposal from Rep. Jim Oberstar, D-Minn., to impose a 5-cent-per-gallon gasoline tax increase to fund $25 billion in bridge repairs. Mr. Bush said lawmakers would first have to go cold turkey on highway pork and demonstrate that the country’s most important infrastructure projects are being completed first. “Before we raise taxes, which could affect economic growth, I would strongly urge the Congress to examine how they set priorities,” the president said.
Mr. Bush also rejected the idea of federal handouts to homeowners facing foreclosure. Millions of home loans have defaulted and millions more are at risk amid a nationwide market correction. Mortgage bailouts would only serve to keep people in homes they can’t afford, limiting the supply of homes for sale and keeping prices artificially high.
“Obviously anybody who loses their home is somebody with whom we must show an enormous empathy,” Mr. Bush said. “If you mean direct grants to homeowners, the answer would be ‘No, I don’t support that.’ “
The president even touched on two issues that have been all but invisible amid the hoopla over this year’s Democratic takeover of Congress: tax reduction and tax simplification. He said he’s interested in cutting the federal corporate tax rate from 35 percent to 27 percent in exchange for eliminating some tax breaks, thereby shrinking the IRS code and broadening the tax base. Several economists and executives who met with Treasury Secretary Henry Paulson last month agreed that the country’s Byzantine tax structure hurts its ability to compete with nations that offer lower corporate tax rates.
It’s too bad President Bush wasn’t as dedicated to limited government and fiscal responsibility earlier in his tenure. Had he drawn a line on pork spending and government growth when he first took office, the budget deficit and national debt would be reduced and a healthy economy might be even stronger today.
But for now, anyone who values their paycheck can be thankful that President Bush will prevent the lunatic left from looting the private sector and the federal treasury.
Whether such economic chaos can be avoided past 2008 will be up to the electorate.