One Step Closer to the Apocalypse

From today's New York Times:

"Against some of the best economic advice in the land, President Bush and his Republican Congressional leaders have concocted a benighted final tax-cut plan that will do far more to deepen the nation's deficits and debt than to stimulate the wallowing economy. In a rush for approval by Memorial Day, the leaders have cannibalized parts of competing packages into a tentative $318 billion grab bag that again offers the most significant relief to the upper-bracket Americans so dear to the administration. Dividend taxes will be cut, not eliminated as the president hoped, but so will capital gains taxes. The latter was a conservative chestnut rejected two years ago when the first Bush cuts were enacted in the long-ago euphoria of an actual budget surplus.

This time, with the budget hemorrhaging red ink, the G.O.P. takes care to include $20 billion in much needed fiscal relief for battered state and local budgets, whose problems can be traced in part to the first Bush cuts. And the leaders are wrapping their package in middle-class sweeteners like child-care credits and relief for married taxpayers. But those boons are cynically "sunsetted" to expire after three years to fit into fictitious limits of fiscal responsibility. In contrast, there is no such asterisk on the accelerated cut in all tax rates, including the most controversial drop in the top rate, to 35 percent from 38.6 percent — a windfall of scores of thousands of dollars annually for wealthy Americans.

This version of the president's "growth" plan will increase the deficit by hundreds of billions of dollars across the next decade. To help pay for it, the G.O.P. budget hawks of yore, born again now as deficit spenders of record proportions, will soon have to raise the national debt limit by almost a trillion dollars from the current $6.4 trillion. This is particularly urgent now that the current year's deficit is ballooning beyond estimates, toward $400 billion, with the two Bush tax cuts expected to add well over $2 trillion in deficits by 2013. "Deficits do matter," the Federal Reserve chairman, Alan Greenspan, warned Congress, sounding like a Dickensian wraith ominously foreseeing a future of red-ink borrowing and rising interest rates. But the Republicans appear set to party on now and roll the tab over the far horizon."

Well, now we're even more f*cked. Thanks, you heartless congress. (Note: one-time registration is required - and worth it.) Also, see Angry Bear's analysis.