Now I’m going to point to Paul Krugman’s column today, which ends with the line,
Trust me: we’re going to miss Rubinomics. Maybe not today, and maybe not tomorrow, but soon, and for the rest of our lives.
He’s saying here that we’ll eventually pay a great price for Bush’s deficits.
I want to point out that the costs of tax cuts for the wealthy arrive sooner than that. We currently pay over $300 billion per year for interest costs because of Reagan’s budget deficits. That amounts to a $300 billion tax increase, paying for Reagan’s tax cuts for the wealthy. The kicker is, by and large, the wealthy receive that interest.
So what we saw in the early 80’s wasn’t just a tax cut for the wealthy, it was also the creation of a huge government spending program, almost the largest item in the U.S. budget, almost entirely to the wealthy. This is also what the Bush tax cuts mean for our future. A huge spending increase – increased future debt interest payments from us to the wealthy.
The current tax cuts are coming out of our Social Security money! We pay into Social Security, it runs a surplus, but that surplus is going out to the tax cuts for the rich. So not only will will have to pay interest to the wealthy, we will have to pay that interest instead of retirement payments to ourselves.