The Emperor’s New Clothes
as a wee lad, my father used to read me Hans Andersen’s Fairy Tales. One of my favorites was the story of the Emperor’s new clothes, in which a couple of crooked tailors were hired by a silly Emperor to make him some new clothes. The swindlers tell the Emperor the clothes are made from a material that is invisible to anyone who is either stupid or unfit for his position. The Emperor is unable to admit that he cannot see the clothes. His courtiers are all too proud and sycophantic to tell their puffed-up boss the naked truth; that he has been swindled and is standing there starkers. It takes a child to break the sad catalogue of self-importance and genuflection.
Eventually everyone but the Emperor and his advisers are laughing at the ridiculousness of the whole thing. The proud Emperor carries on regardless.
The current economic situation reminds me of that tale.
President Bush, convinced that tax cuts are some holy grail that, no matter the circumstances, will bring prosperity to his nation, enacts tax-cutting measures. He preens himself as those around him tell him that his economy is growing gangbusters and that the tax cuts must be made permanent. The trouble is that tax cutting only truly leads to national prosperity if the economy continues to grow at the rate the advisers say it will. Sadly, the President has failed to realize that if the economy does not provide the required revenue, then there must be cuts in spending, or national borrowing must increase. If spending goes through the roof and revenues fall, as is currently the case, then the national debt (as a percentage of GDP) will soon exceed the level that Bush 41 left it at.
The role of the President and government is to lead, and currently our leaders are setting an appalling example. Instead of exhibiting fiscal responsibility the administration appears determined to mortgage our future. Meanwhile, the average citizen is following the lead of its government and living off debt, in many cases borrowed against shrinking assets. Credit card debt in the U.S. is ever increasing.
Add to that the weak dollar, rising unemployment and a military financial commitment that is never ending, and the outlook is decidedly bleak. Perhaps the President’s advisers cannot or will not reveal the naked truth. Perhaps the President is deaf to their warnings. Perhaps they all have their heads in the sand. Whatever the score, like the Emperor, President Bush is seemingly in denial, still believing that, even if it means growing the national debt by a staggering $410 billion a year, tax cuts remain the solution even as spending is allowed to balloon out of control.
The size of the $3.1 trillion budget the President has just presented to Congress is larger than any in history, but would not be of concern in a rosy economy. The trouble is that the economic outlook is rather bleak, given the U.S. economic engine is increasingly dependent on continued spending. As recession looms, and money gets tighter, people will slowly stop buying and the hole that the government is getting into will take a lot of getting out of. Spending today has to be paid for with taxation tomorrow ” or unwelcome cuts in services.
The Bush plan to stimulate the economy sounds good. Unfortunately most taxpayers will use their windfall to pay off existing debt or purchase things that will serve mainly to stimulate other economies, not that of the United States. It also feeds the spending addiction of the average U.S. citizen and puts off the day when reality needs to be faced. It is all mere politicking.
Emperor Bush 43 has no clothes, and we all need to realize that things have got to change if we are to get out of the hole that he appears determined to keep digging. Sadly, it is likely that politics and procrastination will rule in 2008, and reality will have to wait until 2009.
Support Local Journalism
Start a dialogue, stay on topic and be civil.
If you don't follow the rules, your comment may be deleted.
User Legend: Moderator Trusted User