While job creation drags and questions about the sustainability of the feeble recovery resonate across the country, President George W. Bush has announced a 2005 federal budget of $2.4 trillion.
It will concentrate our financial resources mainly on war, fighting terrorists and trying to boost the economy.
The president predicts budget shortfalls this year of $521 billion. Bush said he will be able to cut in two the federal deficit in five years through a shortfall of $237 billion in 2009.
Last year, the deficit hit $375 billion and this years deficit is projected at $364 billion, but theres some sleight of hand going on here. White House Budget Director Joshua Bolten said a request for more funds for military operations in Iraq and Afghanistan may up the ante by as much as $50 billion. And the Chicago Tribune recently reported the administration is making plans to invade Pakistan in an effort to catch Osama bin Laden.
As usual, the president gave no details on how he would achieve his goals, especially cutting the deficit in two.
Bush told a cabinet meeting: Im confident our budget addresses a very serious situation, and that is that we are at war and we had dealt with a recession. And our budget is able to address those significant factors in a way that reduces the deficit in half.
The president also wants more tax cuts$1.1 trillion in the next 10 years. Bolten said Bush wants to drop 65 programs and trim 63 others. That would save about $4.9 billion.
The blueprint immediately drew fire from Bushs Democratic opponents in the current campaign. The president clearly does not understand the economic, social and security challenges that our nation faces today, declared Sen. John Kerry, D-Mass.
As reported in this space previously, the economy produced only 1,000 new jobs in December, way below the 150,000 predicted by analysts.
Along with that disappointing performance, the dollar hit new lows against a number of currencies, and interest rates dropped.
Nigel Gault, U.S. research director for Global Insight, a consultant firm, said: The fact that the recovery is still failing to create enough jobs does raise questions about the sustainability of the revival. Hopefully, we will get much better figures over coming months. If not, it will be very worrying.
Billionaire George Soros, who has dedicated himself to defeating Bush in November, warned of dire consequences next year.
Speaking in London, Soros said he thinks the U.S. economy will have strong growth this year. Right now, we have a very favorable conjuncture because the U.S. economy is in the hands of Karl Rove, the strategist arranging for the campaign of Bush, Soros said. Everything that could be done to pump up the economy has been donesuccessfully so far. But there will be a penalty to pay after the election, so it looks good this year but less good from 2005.
Abraham Lincoln displayed an uncommon prescience in the course of economic policy way back in 1863. Lincoln said then: The money power preys upon the nation in times of peace and conspires against it in times of adversity. It is more despotic than monarchy, more insolent than autocracy, more selfish than bureaucracy.
I see in the near future a crisis approaching that unnerves me and causes me to tremble for the safety of my country. Corporations have been enthroned, an era of corruption in high places will follow, and the money power of the country will endeavor to prolong its reign by working upon the prejudices of the people until the wealth is aggregated in a few hands and the Republic is destroyed, Lincoln said.
Economic analysts in other countries are well aware that the Bush administration is waging economic war on the rest of the world.
America has launched its own weapon of mass destruction, said Nick Parsons, a currency analyst with Commerzbank. The U.S. solution to deflation is to export it to the rest of the world.
The strategy of allowing the dollar to drop against other currencies is designed to weaken European economies.
Europeans are well aware that one of the principal reasons behind the Iraq war was to get Iraq oil interests switched from the Euro back to the dollar as the currency of exchange.
Another reason was to create a new and massive oil cartel that would replace OPEC.
A new strategy being considered in the Arab world is to re-adopt the gold dinar as the medium of exchange. The dinar contains 4.25 grams of 24-karat gold and would aid Muslim nations in fighting Bushs misuse of the dollarthe Federal Reserve notewhich is backed by absolutely nothing.
How the Bush administration would react in that eventuality is a matter of speculation, however interesting or chilling.
Soros said: I think Bush is changing the character of the U.S. and leading it in the wrong direction. A bunch of ideologues has captured the executive and taken America too far to the right.
Sources: The Independent-Philip Thornton; The High Cabals Economic War against the World by Norman Livergood; Financial Times-Christopher Swann; Capitol Hill Blue-Alan Fram.