George W. Bush's Voodoo Economics

I recently read a letter in an agony/advice column from a woman who admitted to taking out credit cards in her daughter's name and spending them up to the limit because her own credit was in such sad shape.

Imagine that -- stealing your child's credit rating AND making your child responsible for YOUR debts.

But that's exactly the position in which George W. Bush's profligate spending on the war and on tax cuts for his buddies has put YOU.

From Buzzflash:

Though the Bush Administration's official budget lists the national debt and deficit as being incredibly high, they are actually far worse than reported, according to Rep. Jim Cooper (D-TN). But don’t just take his word for it, even if Cooper is a Rhodes Scholar and Harvard Law graduate. The following figures appear in the official U.S. Financial Report, released by the Treasury Department:

• The true 2005 deficit was $760 billion, not the $318.5 billion Bush reported
• This is 6.2% of the GDP, not 2.6%
• That's $156,000 for every citizen, or $375,000 for every working American
• The true national debt is $49 trillion, not the $8.3 trillion Bush reported
• This figure has more than doubled in the past five years
• We paid $327 billion last year on interest alone
• It's all getting worse

What accounts for the huge discrepancy? Unlike businesses, the government uses "cash" instead of "accrual" accounting. This means that the government does not report future spending promises like Medicare and Social Security, or even future spending guarantees like veterans' benefits and federal employee pensions.

"Cash accounting tells you what's in your bank account. Accrual accounting tells you what's in your bank account and what's on your credit card statement," Cooper told BuzzFlash in an interview. "Whether you're promising to buy a road or something at Target, you need to know what you promised to buy. That should be a binding obligation of the government. We've made a world of promises to folks that we need to keep."

But wait, there's more! The U.S. Financial Report does not mention that if Medicare and Social Security are factored into the equation (which the Treasury Department did not), the true deficit was actually a whopping $3.3 trillion last year, over ten times more than Bush claims. And when Social Security projections are adjusted to reflect current life expectancies instead of the old 75-year mark, Cooper said the true national debt is "probably closer to $65 trillion."

Worried that a new Democratic majority in the House would be blamed for the higher numbers in the future, Cooper has taken it upon himself to make it clear that the problem has already been created by Bush's failed economic policies. "This has to be announced on their watch, using their voice," he said. "There's a great urgency about this: we only have two months left to educate all Americans about how the Bush deficits are literally destroying America's credit."

"I think [the report] is the most powerful critique of the Bush Administration" because they produced it, Cooper added. "No Republican can deny this attack."

In order to get the word out, Cooper reprinted the entire U.S. Financial Report in a book with his own explanatory introduction and a warning on the cover reading, "The Official Report the White House Does Not Want You To Read." He said the measure was necessary because the Administration tried to hide the report by distributing it to fewer than 20 members of Congress in the midst of the Christmas holiday season with no accompanying press release or media announcement.

According to Cooper, conservatives won’t touch the issue because it would make Bush look bad, liberal newspapers think it's too confusing, and liberal politicians are worried the ensuing chaos from the higher numbers would limit social program spending. "The way we're going, we're going to have to eliminate programs," Cooper retorted. "Isn't it better to embarrass Bush while we can with his own words and to get Democrats in control?"

Cooper said he is determined to do everything he can to add honesty to the federal budget. He gave the first copy of his book to House Democrat Leader Nancy Pelosi and has introduced legislation directing the president to use accrual accounting in his reports. A similar measure was recently lost in the Senate after passing in the House.

The only compensation Cooper is receiving for the book are three complimentary copies.

Click here to order your own from Powell's Books.