Bushs four horsemen of economic policy

George W. Bush is an old-fashioned kind of ruler. He imagines himself divinely chosen to serve his tribe of economic royalists. “By the rich, for the rich” is his governing philosophy.

Speaking to a gathering of his wealthy supporters in a moment captured on film, Bush once remarked: “What an impressive crowd: the haves, and the have-mores. Some people call you the elite. I call you my base.”

Echoing the biblical Four Horsemen of the Apocalypse (War, Famine, Pestilence, and Death), Bush’s economic policies seek to saddle us with these “four horsemen”: tax cuts (primarily for super-rich); privatization (e.g., Social Security “reform”); deregulation; and empire through permanent war. This column looks at the first two of these four.

In a recent column in the Seattle Post-Intelligencer titled “Yacht owners enjoying a huge perk — tax breaks,” investigative reporter Eric Nader captures Bush’s preferential treatment of the leisure class. He writes: “Some ultra-rich yacht buyers are expecting to deduct millions from their income tax next year under provisions of the Bush administration’s tax-relief program.” Not only can yacht be declared “second homes” for tax purposes, but corporations can also deduct their yachts as a “business resource.”

Beyond stimulating the sale of luxury goods, Bush’s changes in the tax code are designed to boost the fortunes of Wall Street. With the infusion of billions of dollars in tax savings, the wealthy can be expected to increase their speculative activities on the stock, futures and derivatives markets, yielding huge profits to Wall Street brokerage houses.

No matter that such tax breaks will create record-shattering deficits that threaten to bankrupt public services and mire us in debt for years to come.

New York Times reporter Richard Stevenson recently wrote about a group centered around Vice President Dick Cheney’s that’s seriously considering the abolition of the existing tax system, “replacing it with a new one, built around the idea of exempting savings and investment from taxation and effectively levying a tax only on consumption.”

At the same time, the administration is determined to keep the tax breaks for the wealthy “revenue neutral.” This means shifting the tax burden even further onto the shoulders of working people and making deep budget cuts in social programs.

Along these lines, Jonathan Weisman and Jeffery Birnbaum write in the Washington Post: “The administration is considering eliminating the deduction of state and local taxes on federal income tax returns and scrapping the business tax deduction for employer-provided health insurance.” If this Machiavellian plan were to go into effect, it would put all employee insurance plans in jeopardy, while further eroding support for vital services funded through state taxes.

Another gift to the financial elite is the administration’s determination to privatize Social Security. Not only would bondholders benefit from the interest payments generated on the estimated $2 trillion in transition costs, but also a variety of financial institutions would reap a windfall as tens of millions of workers begin diverting some percent of their payroll tax into individual retirement accounts. Workers’ retirement funds would be linked to the vagaries of the stock market, rather than in more secure Social Security system as it exists now.

Substituting private, “faith-based” institutions for public education and social services is another way to secure the support of important right-wing political constituencies while at the same time marginalizing public, in many cases unionized schools and agencies, which, in any event, have been systematically degraded by tax-cut driven budget cuts and the growing costs of permanent war.

If Bush’s four horsemen are permitted to gather speed in the coming years, soaring budget deficits will be joined by a host of other festering deficits: environmental deficits; peace deficits; racial equality deficits; health care deficits; educational deficits; job deficits; trade deficits; wage deficits; infrastructure deficits; state/city deficits; and democracy deficits.

But no matter how clever the propaganda, mounting resistance to the realities of these accumulating deficits is bound to corral the four horsemen.

The author can be reached at economics@cpusa.org.