Socialist Action /September 2000
Paul Krugman: 'Counting Chickens Before
They Hatch'
The bulk of the accompanying article, "The
'budget surplus' and other misconceptions" was written in the month
of July. Since then, the Republicans and Democrats had their national conventions
and officially nominated their presidential slates. This has formally launched
the political struggle between the two main factions of the capitalist class
over which will become the main political servant of the financial and industrial
corporate elite of U.S. capitalism.
Both the Democratic Party Gore-Lieberman and the
Republican Party Bush-Cheney tickets support the budget surplus myth and
favor a hefty tax cut for the rich. The only real difference between these
two factions of the capitalist class is the time honored confidence game
of "good" versus "bad" capitalist politicians:
Republicans say they want to give a $1.3 trillion
tax cut to the rich and the Democrats promise to give less than half that-$500
billion-to the banking and industrial corporations that each and every capitalist
politician faithfully serves.
But all capitalist politicians insist that a tax
cut for the rich will be "good for the American economy"-and of
course, all of them agree that "what's good for capitalists is good
for all the people."
More recently, new voices have been raised in criticism
of fantastic projections of a budget surplus bonanza on the one hand and
cutbacks in Social Security entitlements on the other.
Paul Krugman, a prominent financial columnist for
The New York Times, has found it necessary to help debunk the claims of
a budget surplus that the mass media has been promoting for the last couple
of years.
In his Aug. 23 column, titled, "Counting Chickens,"
Krugman challenges the substance of the claimed trillions of dollars in
budget surpluses expected over the next 10 years. He cites some figures
refuting the premises of the mythological budget surplus bonanza and then
writes:
"So our political debate [between Bush and
Gore over the alleged surpluses] is based on projections saying that in
the years ahead the federal government will run average annual surpluses
about 10 times as big as this year's actual surplus.
"Doesn't that sound a bit like counting your
chickens before they've hatched? Wouldn't you at least want to take a very
careful look at the eggs?
"A new analysis by Alan Auerbach and William
Gale (of Berkeley and Brookings respectively) does just that. And its conclusion-that
those projections are unreasonable, that the future surpluses we've been
taking for granted are figments of our imagination-is already ruffling feathers."
Krugman cites further facts in his column essentially
repudiating virtually the entire budget bonanza myth. He ends by warning:
"The most likely prospect is that those big surpluses won't materialize.
And when the chickens that didn't hatch come home to roost, we will rue
the days when, misled by sloppy accounting and rosy scenarios, we gave away
the national nest egg."-N.W.
Socialist Action /September 2000 |