Americans overcharged no longer

When George W. Bush made his plea to Congress for his grandiose tax cuts back in 2001, he stated that "The people of America have been overcharged and, on their behalf, I'm here asking for a refund." (see here for the quotation). Bush was right, in a way -- the country was earning surpluses in the federal budget, and had been for a few years. With the economy in good shape but wobbling a bit, tax cuts seemed like a decent strategy to keep the good times going.

Of course things quite turn out as planned. Over the next while, the tech bubble burst, the attacks of September 11 occurred, and two money-sucking wars were started. And all this happened while regular pork-barrel spending in Congress continued unabated. Rather than surpluses, the country was racking up record deficits (at the time -- they're even worse now, of course).

In view of the original argument about being "overcharged", then, why oh why is it considered even among Democrats a mortal sin to let these tax cuts expire on schedule? Moreover, why do most media outlets treat the issue in the same way? The Economist, as expected, weighs in on the side of keeping the cuts in this article:

Some form of extension of the cuts for most households does seem prudent. America’s economy can ill afford a big fiscal blow. A return to recession is still unlikely, but the odds of one have recently increased.

Yet earlier the same article stated the following:

The tax cuts, which were supposed to last for only ten years, had their genesis in the 2000 presidential campaign, when both Mr Bush and Al Gore, the Democratic candidate, proposed to return a portion of the then budget surplus to voters. As the economy tipped into recession in 2001, stimulus became the rationale for the cuts, and for the 2003 law that phased them in more rapidly than originally planned.

Does The Economist not see that their argument for keeping the cuts going is simply another in this long line of excuses?

I seem to recall that things were pretty good in the post-recession 1990s, even if a good chunk of that wealth was later proven to be ill-invested in bad tech. Employment increased, wealth increased, stocks increased -- everything increased, all while income taxes were set at this supposed draconian level.  The 2000s?  Not so great, even with the cuts.

Perhaps a gradual reintroduction of the old tax rates might provide less of a shock to an unsteady economy. But why isn't there anybody coming even close to advocating this sort of plan? Income taxes can't keep coming down forever if there are no other revenue streams to make up the loss. The Economist talks about a VAT like it could ever happen in the U.S. It won't. So this is the one of the few other options.

The two for one speech

Even though yesterday did actually mark the date when President Obama had earlier stated that combat operations in Iraq would end, he still faced criticism for taking to the airwaves to announce this fact. The last combat troops had already left the country a while back, and recent economic news seemed to demand his attention. Obama's solution? To turn the speech into one about the economy.

You can read the full text here on MSNBC. But just listen to this opener:

I know this historic moment comes at a time of great uncertainty for many Americans.

We have now been through nearly a decade of war. We have endured a long and painful recession. And sometimes in the midst of these storms, the future that we are trying to build for our nation - a future of lasting peace and long-term prosperity may seem beyond our reach.

But this milestone should serve as a reminder to all Americans that the future is ours to shape if we move forward with confidence and commitment. It should also serve as a message to the world that the United States of America intends to sustain and strengthen our leadership in this young century.

Translation -- hang in there, I'll get to this economic stuff later!

To be fair, the President made some eloquent remarks about the war and the divisions it created within America. He did not shy away from the fact that he disagreed with it, nor did he ignore the painful price paid by the country in waging it.

But, come on, if you're going to talk about the war in Iraq - the war that so many of us opposed from the outset, the war that appears to have left the supposedly "freed" country on the verge of complete collapse - at least talk about the war and those who had to wage it. Give those people a minute of your time, and don't tweak the speech to match political goals.

Have a look at this particularly cynical bit at the end:

Unfortunately, over the last decade, we have not done what is necessary to shore up the foundation of our own prosperity. We have spent over a trillion dollars at war, often financed by borrowing from overseas. This, in turn, has short-changed investments in our own people, and contributed to record deficits. For too long, we have put off tough decisions on everything from our manufacturing base to our energy policy to education reform. As a result, too many middle class families find themselves working harder for less, while our nation's long-term competitiveness is put at risk.

And so at this moment, as we wind down the war in Iraq, we must tackle those challenges at home with as much energy, and grit, and sense of common purpose as our men and women in uniform who have served abroad. They have met every test that they faced. Now, it is our turn.

Now, it is our responsibility to honor them by coming together, all of us, and working to secure the dream that so many generations have fought for -the dream that a better life awaits anyone who is willing to work for it and reach for it.

Our most urgent task is to restore our economy, and put the millions of Americans who have lost their jobs back to work. To strengthen our middle class, we must give all our children the education they deserve, and all our workers the skills that they need to compete in a global economy. We must jumpstart industries that create jobs, and end our dependence on foreign oil.

We must unleash the innovation that allows new products to roll off our assembly lines, and nurture the ideas that spring from our entrepreneurs. This will be difficult. But in the days to come, it must be our central mission as a people, and my central responsibility as President.

In one fell swoop, Obama blames the war for the current deficit, and then delivers his usual prattle about the "innovation" that will supposedly "unleash" a great new America.

To borrow one of the President's lines, let me be clear -- I was firmly against this war, aghast at the way it turned out, and glad to see so many American troops come home, hopefully to never return. Obama's hedge-betting is the problem here. He won't commit to a single issue and/or opinion, even in one little speech.  He heard the criticism about the timing of his speech given the country's economic problems, and changed the speech to make it about that.