Dooh Nibor Economics By PAUL KRUGMAN Published: June 1, 2004 Last week the Washington Post got hold of an Office of Management and Budget memo that directed federal agencies to prepare for post-election cuts in programs that George Bush has been touting on the campaign trail. These include nutrition for women, infants and children; Head Start; and homeland security. The numbers match those on a computer printout leaked earlier this year â one that administration officials claimed did not reflect policy. Beyond the routine mendacity, the case of the leaked memo points us to a larger truth: whatever they may say in public, administration officials know that sustaining Mr. Bush's tax cuts will require large cuts in popular government programs. And for the vast majority of Americans, the losses from these cuts will outweigh any gains from lower taxes. It has long been clear that the Bush administration's claim that it can simultaneously pursue war, large tax cuts and a "compassionate" agenda doesn't add up. Now we have direct confirmation that the White House is engaged in bait and switch, that it intends to pursue a not at all compassionate agenda after this year's election. That agenda is to impose Dooh Nibor economics â Robin Hood in reverse. The end result of current policies will be a large-scale transfer of income from the middle class to the very affluent, in which about 80 percent of the population will lose and the bulk of the gains will go to people with incomes of more than $200,000 per year. I can't back that assertion with official numbers, because under Mr. Bush the Treasury Department has stopped releasing information on the distribution of tax cuts by income level. Estimates by the Urban Institute-Brookings Institution Tax Policy Center, which now provides the numbers the administration doesn't want you to know, reveal why. This year, the average tax reduction per family due to Bush-era cuts was $1,448. But this average reflects huge cuts for a few affluent families, with most families receiving much less (which helps explain why most people, according to polls, don't believe their taxes have been cut). In fact, the 257,000 taxpayers with incomes of more than $1 million received a bigger combined tax cut than the 85 million taxpayers who make up the bottom 60 percent of the population. Still, won't most families gain something? No â because the tax cuts must eventually be offset with spending cuts. Three years ago George Bush claimed that he was cutting taxes to return a budget surplus to the public. Instead, he presided over a move to huge deficits. As a result, the modest tax cuts received by the great majority of Americans are, in a fundamental sense, fraudulent. It's as if someone expected gratitude for giving you a gift, when he actually bought it using your credit card. The administration has not, of course, explained how it intends to pay the bill. But unless taxes are increased again, the answer will have to be severe program cuts, which will fall mainly on Social Security, Medicare and Medicaid â because that's where the bulk of the money is. For most families, the losses from these cuts will far outweigh any gain from lower taxes. My back-of-the-envelope calculation suggests that 80 percent of all families will end up worse off; the Center on Budget and Policy Priorities will soon come out with a more careful, detailed analysis that arrives at a similar conclusion. And the only really big beneficiaries will be the wealthiest few percent of the population. Does Mr. Bush understand that the end result of his policies will be to make most Americans worse off, while enriching the already affluent? Who knows? But the ideologues and political operatives behind his agenda know exactly what they're doing. Of course, voters would never support this agenda if they understood it. That's why dishonesty â as illustrated by the administration's consistent reliance on phony accounting, and now by the business with the budget cut memo â is such a central feature of the White House political strategy. Right now, it seems that the 2004 election will be a referendum on Mr. Bush's calamitous foreign policy. But something else is at stake: whether he and his party can lock in the unassailable political position they need to proceed with their pro-rich, anti-middle-class economic strategy. And no, I'm not engaging in class warfare. They are.
Robbing from the middle class is nothing new. Usually it's the Democrats doing it, but since all politicians are basically part of the same slimy sub-species - why shouldn't it be a non-denominational act??
Exactly, it has never been any other way and NEVER WILL BE ANY OTHER WAY unless the middle class puts a lobbyest in every state governors office, every state congressmans office, every state senators office, every federal senators office etc. Only then will they have a fighting chance to combat the corps. who do just that with the $$ they should be paying in taxes.
How do you "rob" money from people when they never had it in the first place? Krugman of course knows better, but he enjoys being the toast of the NY Times, so he makes up economic folly to go along with the political philosophy of Michael Moore and other mainstream Dem's. This kind of psuedo socialist rant begins with the assumption that everyone's money is basically just on loan from the government. So if the government lowers taxes, that is an outrageous "gift" to the rich, not just an example of letting people decide how to spend or save moeny they earned. And if government spending, or the rate of increase thereof, is cut, that is an even more despicable "theft" from "working" people or the "poor", despite the fact that they see precious little of the vast sums wasted on these programs and in many cases would be better off without them. So, Paul Krugman, PHD in Economics, the next time you walk past a Salvation Army stand and don't empty your pockets, I hope you feel good about "stealing" from the "poor."
Here is a clue for you. Assume Krugman is a hypocrite. Is his argument less true? Are the rich not getting richer, and is the middle class not shrinking? Deal with the argument, and don't attack the man for making the argument. This methodology of attacking the man, when you cannot refute the argument is the indication of a weak position in relation to the argument.
Of course the rich are getting richer. LOL. What's the point to getting rich if you can't invest that money and get richer? LOL. ART, dude look man, you say you are a trader so surely this concept will warm to you. The reason there is a gap between the rich and the poor in this country is because the rich own things OK? They own houses, stocks, bonds, hedge funds, private business. These things appreciate in value. The poor do not own things. Why? Because they are poor. When I was poor I didn't own jack squat. When you are poor, you rent, you don't own stocks, houses, mutual funds, hedge funds, or businesses. So basically your net worth is not going to appreciate. After taxes and expenses whatever you have left over you need to save for health care or college. See ART, this is why it's the goal of the poor in this country to get rich. What do you want to do, take money from me? Take money out of my hedge fund, my savings, my stocks, my trading account and give it to the poor? LOL. OK ART, come and get it, but you might be looking down a barrel when you get to my door. LOL.
LOL...Good one. You actually believe any of what you say? Or is it about the argument rather than dealing with reality? Is David Duke a mainstream Rep? Peace, RS
The richest few % of society pay the bulk of income taxes. Incontrovertible government data clearly shows that the rich are being robbed to pay money to the poor & middle class, in almost all western societies. Therefore Krugman's claim is not only incorrect, but is the exact opposite of the truth.
David duke was savagely denounced and disowned by Republicans when he ran as a Republican. I have yet to hear any Dem denounce Michael Moore or any of the other whacko voices that increasingly define that party.
Exactly, plus the argument assumes that the people in the various classes are static. this is far from true. The "poor" in these surveys typically include part time workers, new grad's, those temporarily laid off, etc. The hard core poor are a very small percentage. One of the great things about our system is that there is incredible mobility between the classes of wealth. the poor move into the middle class, the middle class become wealthy, the wealthy die and their kids squander their inheritences. One of the principal means for this mobility is small business. Heavy taxes strike directly at those who start and operate small businesses. Krugman's desire for big government programs supported by heavy taxes will ultimately end up frustrating this class mobility and leave those on the bottom in a life of poverty. Of course, that would hardly be the only liberal program that was meant to help the poor but ended up devastating them.