A bankrupt America
When former US President Bill Clinton entered the White House, his first act to raise taxes on wealthy Americans to stem a runaway budget deficit. Clinton's tax-hike on the rich, denounced by Republicans as "a passport to recession," balanced the budget, produced a surplus, lowered the long-term interest rates and triggered the longest economic boom in recent history. His successor President George W. Bush squandered the surplus by his staggering $1.67 trillion tax cut, producing a massive $400 billion deficit.
Calling Bush's tax-cut a "tax fraud," The Washington Post wrote on May 26, 2001: "A tax cut that large strips the government of the resources it needs to meet its obligations -- shore up Social Security and Medicare, beef up defence, pay for the rest of the services, from highways to Head Start, that the public has rightly come to expect." This has exactly happened when America faced the double whammy of fighting a war on terrorism in the wake of 9/11 and the collapse of its entire banking system in the wake of sub-prime mortgage crisis.
Today, America is mired in deep recession and a budget deficit of epic proportions at a time when the government needs to bail out the economy from falling into a depression. The idea that the United States is internationally more competitive has been without foundation for decades, as measured by the most obvious indicator: its massive trade deficits vis a vis the rest of the world, especially China. Last year, the US piled up a staggering trade deficit of $250 billion with China. China is also bankrolling America's massive budget deficits.
A bankrupt America cannot lead the world. Bill Clinton may be the last leader to preside over the United States as the world's unrivalled political, economic and military superpower. For the abrupt fall from glory, blame George W. Bush and his acolytes who undermined the economy by their greed and incompetence.
For all latest news, follow The Daily Star's Google News channel.
Comments