Boneheaded Economic Policies

With March retail sales down, last week's decline in the stock market, and yesterday's report of a steep decline in housing starts, no amount of "cheerleading" by Treasury Secretary John Snow will revitalize the faith of the American consumer in "Bushonomics."  Because consumer spending drives two-thirds to three-quarters of the American economy, there are serious questions whether the consumer can continue to be the engine of growth in the economy.  With high consumer debt levels, under-employment, declining real wages, higher interest rates, and higher gasoline prices, the consumer may well be exhausted.  

And without strong consumer spending, the American economy could spiral downward into a recession. In fact, with the new bankruptcy legislation being signed into law today, the economy could suffer an effect similar to what the Smoot-Hartley Tariff Act did to the Great Depression 75 years ago.  

There's only one solution to keep the consumer spending:  Put more money into the hands of consumers.

But how?  Considering the size of the federal budget deficit, the country can't really afford another across-the-board tax cut--financed mainly by borrowing from foreign banks and governments.  The only source of money that could reinvigorate consumer spending lies where it does not need to be spent:  in the hands of America's wealthiest citizens--those who were suppose to invest in the American economy and create millions of jobs (as promised by President George W. Bush).  Instead the money was sat on, and economic growth has been inconsistent and insufficient.

The time has come to redistribute the Bush tax cuts.  By rescinding the tax cut for those who have income greater than 300,000 dollars per year, another tax cut could be extended to those with lesser income.  This would put money into the hands of people who would likely spend it.  A better idea would be to divide the money between the new tax cut and deficit reduction--with a larger portion going to the tax cut.

So, who would be against greater consumer spending to drive the American economy and a modest reduction to the federal budget deficit?  Why President George W. Bush (a.k.a. - Bonehead), of course. The same man who once addressed a "diamond-studded $800-a-plate crowd" by the following comments:

"This is an impressive crowd - the haves and the have-mores.  Some people call you the elites; I call you my base."

He's such a "bonehead."