'When I use a word,' Humpty Dumpty said, in a rather scornful tone,' it means just what I choose it to mean...'

by Tom Maertens

Someone should give John McCain a copy of “Economics for Dummies.”

Lately he has taken to criticizing “so-called economists” because they disagree with him on a gas-tax holiday. More ominously, he is parroting George W. Bush’s Flat-Earth Economics whereby any gibberish can be used to justify cutting taxes.

You’ve heard the spin: we are rich and can afford to cut taxes while fighting a war, don’t ask how much the war costs, deficits don’t matter and, tax cuts pay for themselves. Hooray! Free lunches all around!

Except that none of that is true. This is borrow-and-spend economics; future generations will pay the bill.

Bush’s costly war and disastrous economic policies have gone far in achieving Grover Norquist’s goal of bankrupting the government – shrinking it to the size where it can be drowned in the bathtub was his metaphor -- in order to kill Social Security and Medicare.

Bush and his rubberstamp Congress, including Norm Coleman, ran up $4.5 trillion in new debt, financed with foreign loans. Combined with the growing entitlements overhang, the total unfunded liabilities of the U.S. Government now exceed $53 trillion dollars. Does anyone mention this in the electoral campaign?

Bush’s deficits have flooded the world with dollars causing the U.S. currency to drop by half against the Euro, raising the dollar price of oil, and boosting inflation. In fact, the dollar has dropped 40% on a trade-weighted basis since Bush took office, and inflation has now reached the same level as when Richard Nixon imposed wage and price controls in 1971.

If the Chinese, Japanese, or Koreans decide to stop buying dollars – let alone sell off their huge hoards– the U.S. currency will sink like a rock, requiring an increase in interest rates to finance the deficit. The price of oil and other imports will soar, and as inflation increases, the stock market will tank, eventually taking the real economy with it.

The result of Bush’s profligacy is that the world is moving away from the dollar as a reserve currency, with potentially momentous consequences for the U.S. Since Bush took office, the dollar’s share of total world foreign exchange reserves has dropped from 73% to 64%. That trend is likely to continue.

The Republican Party, following the lead of Norquist’s Americans for Tax Reform and the Club for Growth, continue nonetheless to push for even more tax cuts, apparently on the theory that “the worse things get, the better.” If your goal is to kill the social safety net, borrow-and-spend is a good way to do it, along with a campaign to privatize Social Security.

Republicans sometimes cite the sainted Gipper as evidence that tax cuts “work,” ignoring the fact that Reagan had to pass the largest tax increase in U.S. history two years later because his deficits threatened to swamp the economy.

John McCain apparently thinks these are just scare scenarios from “so-called economists,” because he now wants to make Bush’s tax cuts permanent and even add to them (while still claiming he will balance the budget, someday, over the rainbow). Economists estimate that McCain’s proposed tax cuts would increase the national debt by $5 trillion over ten years. Real men don’t raise taxes to pay the bills; they borrow the money.

Despite his endorsement of crackpot economics, John McCain claims he is a fiscal conservative.

“'When I use a word,' Humpty Dumpty said, in a rather scornful tone,' it means just what I choose it to mean, neither more nor less.'

'The question is,' said Alice, 'whether you can make words mean so many different things.'”

So what is the opposite of fiscal conservative?