Sunday, May 23, 2004


Shall We Have a Go?

A few days ago, I suggested that I might spend some time in BlogWorld making my case for why I don't believe Goerge W. Bush deserves a second term in office. On a quiet, rainy Sunday, I think I shall start down this path. I will be writing this up in multiple posts over the next few days and, as I venture further into my argument, I expect to spend some time rebutting arguments from others.

Let's start with 9/11, shall we?

On the heels of one of, if not the, most tragic day in modern North American history, I felt that G.W. did an outstanding job of leadership. G.W., along with Rudy Giuliani, did a marvelous job of leading a saddened, grieving, angry country through a very painful period. The effective timing of the transition from grief to action was well-handled and Bush, despite his previously unilateral stance when it came to global relations, did a yeoman's job of marshaling the world's forces to unite in the assault on Afghanistan, resulting in the rapid removal of the Taliban from power and the reduction of Bin Laden's power base.

Had the election happened in 2002, Bush would have been returned to power with quite possibly one of the largest mandates in recent memory. But something happened on the way to the ball.

Bush, in my opinion, misused his clout.

In jamming through Congress an enormous tax-relief package that did too much up high and not enough down lower in the economic food chain, Bush flushed any chance of realistically affording the new Homeland Security initiative down the toilet. As a result, future generations will be paying for this and other initiatives laid on during the last four years. Bush, like Mike Harris here in Ontario, showed the traditional short-sightedness of politicians who ride tax givebacks into office. The simple fact of the matter is this: The general public always adjusts to their taxation levels. The vast majority accept the necessity of funding the government through taxation. However, there really is no greater lure than the promise of what looks like free money. However, the backlash always comes when someone else has to ask for it back. The recent Liberal budget is an excellent example.

Bush reasoned that the tax rebate and rate reductions were necessary to recharge the economy. However, the impending recession was BUSINESS-driven, not consumer-driven, which one would assume since Bush's tax plan put money back into individual pockets, rather than corporate ones. With obscenely low interest rates, individuals were sucked into refinancing their mortgages and drawing equity out of their investments. They also continued to buy homes and cars, thanks in large part to 0% financing. They were also still spending on medium- to big-ticket items. The tax givebacks weren't driving an economic recovery, just piling on debt.

Now, he has a problem. There is a massive federal debt that wasn't there when his watch began, and it is growing. He has a huge Medicare problem that will require a mountain of money to fix (an amount that could have been handled by rescinding the tax rollback), Homeland Security is not fully functioning yet, there are new inflationary pressures (been to a gas pump lately?) and, despite some of the numbers, no REAL jump in hiring, as companies continue to gain through productivity and offshoring.

That last point is key.

You see, eventually, the powers will need to tax again. Bush is saying he wants the sunset provision removed on his stimulus package and he knows why. People will absolutely riot (not literally) when asked to go back to their old taxation levels, especially those who lost higher-paying jobs during the recession and have been unable to find equivalent opportunities since. Living on a budget is hard. When you are given back 2-3% of your income in tax savings and, a couple of yearss later, hit with a 4-5% increase in taxes because the government was short-sighted, it doesn't exactly sit well, you know?

If Bush can obscure this issue during the next 6 months and get another 4-year mandate, he can restore taxation levels (and maybe even increase them) with no worry about losing his position. The next guy that runs will get crushed, but that's not Bush's concern. To (approximately) quote James Carville: "It's the tax, stupid". If John Kerry simply starts to posit that SOMEBODY, whether a new Bush administration or a Kerry administration, will need to tax the masses to reduce the deficit, he can punch some serious holes in the Bush platform.

That's opinion one. I fully expect rebuttals, but that's the fun of this stuff. I welcome comments and thoughtful discussion.