Lula: More Spending, Higher Deficit (But Fewer Viewers)
Karolina Lula, op-ed columnist
Issue date: 2/6/06 Section: Opinions
President Bush's State of the Union address might have pleased those who have actually watched it. The conservatives, content with Bush's stance on domestic and foreign policy, are not complaining too loudly. The address's viewership increased by around 2 million since last year. But "American Idol" still had more viewers on Fox than the President did on any network. We can take this is a pulse of just how important Americans consider their government.
Let's take two important issues that actually affect our lives-civil liberties and government spending. The President asked Congress to reauthorize the Patriot Act. At the same time, he called for the government to curb its own spending. It sounds like good news and bad news, but in reality it is neither.
Bush's proposed tax cuts amounts to $14 billion, but for a government that spends trillions - $2.7 trillion to be exact-the amount is insignificant. It is only roughly 0.5 percent of the budget. Whatever your ideologies are-whether you disapprove of the Iraq occupation or the government's response to Katrina-you must agree that a $400 billion deficit is not healthy for the economy.
Curbing spending makes the economy grow. On the contrary, the government spends a bigger fraction of GDP per year, which bitch-slaps the economy. Six years ago, the government spent just 18 percent of GDP, which was a 20-year low. Today it is as much as 20 percent of GDP. According to the Cato Institute, Bush is the biggest-spending president since Lyndon Johnson. In 2006 there is an 8 percent growth rate, and in the past five years spending increased by 43 percent.
The spending cuts are smaller for 2007 than for the previous years. Meanwhile, a new prescription drug benefit will cost more than $100 billion per year. Instead of the small government promised in Bush's campaigns we are faced with a big conservative government. (Just to be fair, Clinton campaigned on middle class tax cuts, but gave us the largest tax increase in entire history. One on-line political forum joked that we are faced with only two choices of government-Socialism and Socialism Lite.)
The government's pockets are not bottomless. In order to finance the government's spending, it must either tax or borrow. For college students, this should be a bad omen. More importantly, high taxes discourage working, saving, and investing. High taxation and borrowing shoot economic growth in the foot and makes good jobs harder to come by.
People who are in favor of a more benevolent government may argue that the taxes and the spending are necessary to finance social programs that are beneficial to the less fortunate. This line of thinking is a fallacy. Very few government programs have real rates of return even approaching 100 percent. On the contrary, many actually have negative rates of returns.
The number of viewers for Bush's televised speech was lower on any network than the numbers Fox got for its "American Idol." Maybe Americans believe that "American Idol" can do more for them the federal government.
Columnist Karolina Lula is an NCAS political science and economics major.
Let's take two important issues that actually affect our lives-civil liberties and government spending. The President asked Congress to reauthorize the Patriot Act. At the same time, he called for the government to curb its own spending. It sounds like good news and bad news, but in reality it is neither.
Bush's proposed tax cuts amounts to $14 billion, but for a government that spends trillions - $2.7 trillion to be exact-the amount is insignificant. It is only roughly 0.5 percent of the budget. Whatever your ideologies are-whether you disapprove of the Iraq occupation or the government's response to Katrina-you must agree that a $400 billion deficit is not healthy for the economy.
Curbing spending makes the economy grow. On the contrary, the government spends a bigger fraction of GDP per year, which bitch-slaps the economy. Six years ago, the government spent just 18 percent of GDP, which was a 20-year low. Today it is as much as 20 percent of GDP. According to the Cato Institute, Bush is the biggest-spending president since Lyndon Johnson. In 2006 there is an 8 percent growth rate, and in the past five years spending increased by 43 percent.
The spending cuts are smaller for 2007 than for the previous years. Meanwhile, a new prescription drug benefit will cost more than $100 billion per year. Instead of the small government promised in Bush's campaigns we are faced with a big conservative government. (Just to be fair, Clinton campaigned on middle class tax cuts, but gave us the largest tax increase in entire history. One on-line political forum joked that we are faced with only two choices of government-Socialism and Socialism Lite.)
The government's pockets are not bottomless. In order to finance the government's spending, it must either tax or borrow. For college students, this should be a bad omen. More importantly, high taxes discourage working, saving, and investing. High taxation and borrowing shoot economic growth in the foot and makes good jobs harder to come by.
People who are in favor of a more benevolent government may argue that the taxes and the spending are necessary to finance social programs that are beneficial to the less fortunate. This line of thinking is a fallacy. Very few government programs have real rates of return even approaching 100 percent. On the contrary, many actually have negative rates of returns.
The number of viewers for Bush's televised speech was lower on any network than the numbers Fox got for its "American Idol." Maybe Americans believe that "American Idol" can do more for them the federal government.
Columnist Karolina Lula is an NCAS political science and economics major.