|12-20-2004, 02:55 PM||#1|
Join Date: Jul 2004
Location: St. Louis, MO
Local Time: 06:45 AM
Bush Administration: Public Policy and Economics
I just completed my thesis in political science and I thought I'd share some of it with you all. It's about public policy and economics, and I've done a careful analysis of the Bush administration's policy-making method. The paper is very critical of Bush, but only in a factual/statistical sense (since this is in the academic arena, there's no "I hate Bush and everything he does blah blah blah"). I just wanted to see what you all thought of it. Here is a portion of the introduction to my thesis:__________________
Imagine two groups of people waiting at an intersection to cross a street. Everyone has their own destination and purpose; however, all of them must cross the street as a means to their individual ends. There are two strategies that can be used in this endeavor, a centrally coordinated path designed by a leader from each side, or a system of mutual adjustment where everyone follows their own path until adjustment is necessary. Looking at the former, it is easy to see that the two possible outcomes are that the pre-organized path works and the two sides cross the street without collision, or the paths collide in the middle of the street. In centrally planned decision making, there is always the possibility of success as well as the possibility of failure for the whole group. Moving to the second method, every person is free to choose their own path of action. When two people are headed for collision, they can adjust appropriately without having to answer to a higher authority or involve an entire group of people who have nothing to do with that particular adjustment. Using this method, there is very little possibility for failure of the whole group, since decisions are made incrementally when necessary instead of singular synoptic decisions. Moreover, in centrally planned decision making, homogeneity in ideology, goals, and purpose are necessary for “employees” to follow a particular “boss.” As stated in the example, most people have varying destinations with varying objectives. Mutual adjustment protects those differences while efficiently accomplishing the common short term goal of everyone at the intersection at that time.
The Bush administration has taken the path of synoptic decision making in almost every facet of their agenda. Coordination is being viewed as an important step before action, instead of a result of proper action. Centrally planned decision making only works if every choice ends in the right consequence. Well, the actions that the administration has taken disregard the views of all parties involved and have resulted in negative outcomes. There have been two major sources of government spending for the past four years, the Bush tax cuts and war in Iraq. These expenses have sent the country spiraling into debt, causing the largest surplus to deficit turnaround in history. With every major setback, the administration has promised positive gains. However, every time new economic data is released, these promises continue to be unfulfilled.
Conservatives have defended deficit spending for decades, but what has been the effect? First of all, Bush’s across-the-board tax cut has not helped the economy. It has only reduced the amount of capital available to the government, damaged the value of the dollar, and increased inflation. The administration also said the reduced value of the dollar would help the balance of trade, yet the trade deficit is growing larger and larger. Moreover, to combat inflation the Federal Reserve board has increased interest rates. This posits that financially unstable Americans are paying more to borrow money. Since the Federal Reserve board makes fiscal policy and is independent from the government, it cannot control how the federal government spends its money. The money that the government is borrowing has its own interest. Furthermore, high interest rates combined with reckless debt accumulation by the administration has synergized into an economic environment unworthy of international investors. Therefore, the government must borrow from domestic sources and is subject to the same high interest rates as individual citizens. Since government bonds are the only other way the federal government can increase revenue, they must also be considered. First of all, they are also another form of borrowing so eventually government must pay them back. Moreover, Americans get a very low rate of interest back from investing in bonds, so they usually invest in other places. Therefore, the interest rate in bonds must be high enough to encourage foreign investment. However, the high levels of spending by the administration have prevented high interest rates for bonds and damages the chances people will invest. This debt is growing and growing with no end in sight, so government bonds can be eliminated as a fiscal savior to the government.
The war in Iraq is flushing government funds even more due to a lack of proper planning and unforeseen complications. All of these expenditures are being paid for by borrowed money, as previously stated, and also borrowing from within the federal government in its social security savings. To make matters worse, their careless depletion of social security has spurred a debate for the future of this program. The Bush administration has recently made another synoptic decision to overhaul the entire system into privatization. This process will cost the federal government additional billions of dollars which again must be borrowed. The long term effects of this entire agenda are pointing towards a failure of the federal government to provide social security in the future to those in dire need. A large fiscal weight will then be placed on the shoulders of actual citizens who are retired, do not have a steady income, and require federal assistance for everyday expenses. If the federal government and individuals do not have the proper resources, state and local governments will be asked to aid those in need. However, since state welfare programs are funded by federal grants (a federal government that has no money) and local governments earn only enough money from taxes to pay for education, roads, and other public goods, no one will be left who is able or willing to help. A few irresponsible centrally planned decisions have created a new style of trickle down “Bushonomics,” where fiscal problems at the top make their way down to each and every individual.
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