Bush tax plan is grand theft
No proposal to stop mounting layoffs, hunger
By Fred
Goldstein
Speaking in a sugar-coated centrist tone, President George
W. Bush put forward his reactionary program to help the rich
in a televised speech Feb. 27. He ignored the storm clouds of
economic downturn and growing poverty that are haunting
workers and poor people.
The centerpiece of Bush's budget proposal is a massive tax
cut, projected at $1.6 trillion by him but which most
bourgeois economists estimate at $2 trillion. This tax cut
gives small concessions to the workers and the middle class
in order to cover up a huge giveaway to the millionaires and
billionaires.
Rep. Charles Rangel, a Democrat from New York, spoke on
CNN right after Bush's speech. According to him, 60 percent
of the tax cut will go to the richest 10 percent of
taxpayers, and 43 percent of the tax cut will go to the top 1
percent. These figures echo numerous studies by liberal and
labor economists.
In addition, Bush said he would set up a commission to
plan the privatization of Social Security. Under the guise of
setting up "personal investment accounts," Bush would take a
portion of workers' wages set aside for retirement under the
Social Security system and hand it over to the gambling Wall
Street bankers and brokers.
Bush plans to spend $2.6 billion on research for the
so-called National Missile Defense system, which will
ultimately cost hundreds of billions of dollars to build.
This will further enrich the military-industrial complex and
entrench U.S. military domination around the world.
The NMD is a first-strike system outlawed under the
Anti-Ballistic Missile Treaty of 1972. The system is designed
to let the United States launch a nuclear strike with the
knowledge that it can prevent effective retaliation. There is
universal condemnation of the NMD throughout the world.
On the home front, Bush pushed his plan to undermine the
public-education system by promoting charter schools and
vouchers. He also plans to funnel social spending through
churches and synagogues under his "faith-based
initiative."
Bush declared that he would protect Social Security and
Medicaid with trillions of dollars in the future. But the
rich are going to begin getting their tax cut
now--retroactive to Jan. 1.
The Democrats vied with Bush, singing the same tune with
slightly different lyrics. They would give a smaller tax
cut--$900 billion--with somewhat less for the rich. And they
would spend $3.6 trillion to pay off the national debt
instead of the $2 trillion projected by Bush.
But that is really only an argument over the amount of
money to give to the rich and what form it should take. Under
either plan, the tax cuts
mean less funding for desperately needed social spending,
housing, schools, childcare, medical care and public
facilities of all kinds. Paying off the national debt to the
bondholders and bankers means giving to the rich while the
masses of workers are living from paycheck to paycheck.
Projections ignore capitalist crisis
Above all, these grandiose projections of trillions for
this and trillions for that are utterly meaningless. The
instability of capitalism, its unplanned and anarchic
character, makes all such projections subject to complete
reversal based on the profit system's boom and bust
cycle.
For example, a lead article in the Feb. 8 New York Times
stated that "with a swiftness that has taken many governors
by surprise, the slowing economy has sharply reduced state
tax revenue in the last few weeks, forcing a growing number
of states around the South and Midwest to cut their budgets
for the first time in a decade."
The article continued: "As many as 15 states that depend
on sales and manufacturing taxes are suddenly facing spending
cuts of up to 15 percent, producing the first reductions in
education and health programs in years. 'We had a
couple-hundred-million dollars surplus last year, and now
it's all dried up,' said Gov. Jim Hodges of South Carolina.
'It happened so fast that most of our state agencies are
still in denial.'"
The capitalist economic slowdown is the important story
for the working class and for Black, Latino, Asian, Native
and Arab communities across the country, as well as for the
so-called middle class.
Capitalist economists are debating whether there is going
to be a "soft landing" or a "hard landing" for the economy.
But for the workers who suffer the devastating consequences
of any "landing"--layoffs, reduced hours, lower wages,
benefit cuts--this debate is a callous and insensitive
discussion among the ruling class's advisers.
'Soft' or 'hard,' it hurts workers
The bosses are worried because they were hoping that
capitalist expansion and profit growth would continue
indefinitely. But now growing signs of the inevitable bust
are on the horizon.
To the bosses a "soft landing" means only a minor
interruption in the expansion of their profit margins. A
"hard landing" means that their system crashes--and not only
do profits fall, but bankruptcies and massive layoffs
spread.
Such a development can lead to anger, social unrest and
resistance from the masses of workers, which could spread and
endanger the system itself.
For the past several months each economic indicator has
pointed in the direction of capitalist overproduction and
economic downturn.
There has been a wave of mass layoffs. In January the most
outstanding announcements came from DaimlerChry sler, with
26,000 layoffs; WorldCom, 11,000; Nortel Industries, 10,000;
J.C. Penney, 5,300; Textron, 3,600; Motorola, 2,500; AOL-Time
Warner, 2,400; Amazon.com, 1,300; and NBC, 600. February
started with Verizon announcing 10,000 layoffs and Dell
Computer 1,700.
At the end of February JDS Uniphase, the world's leading
manufacturer of components for optical networks, said it
would cut 3,000 jobs. (Financial Times of London, Feb. 27)
3Com, a network-equipment maker, announced it will eliminate
1,200 jobs because sales to telecommunications companies are
down. (Wall Street Journal, Feb. 27)
SCI Systems, a maker of personal computers and printers,
will lay off 10 percent of its 38,000 workers. (Wall Street
Journal, Feb. 26) Texas Instruments will slow production in
five plants and push out 2,600 workers, or 6 percent of its
workforce, through "voluntary retirement." (Dow Jones
Newswire, Feb. 27).
Gov't figures confirm grim news
The latest government announcements confirm the danger.
New home sales plummeted 10.9 percent in January as "worries
about the economy overwhelmed the attraction of cheaper
mortgage rates," according to the Feb. 27 Wall Street
Journal. It was the biggest drop in seven years. Sales of
existing homes fell 6.6 percent; the experts had expected
these sales to rise in January. It was the second consecutive
month of big drops in existing-home sales.
Orders for durable goods--that is, goods that last three
years or more--fell 6 percent. The decline was led by
aircraft sales, but cars, ships and other transportation
equipment were also affected. Orders for primary metals,
including steel, fell for the fourth month in a row. Orders
for electronics, electrical equipment and home appliances
fell by 6.2 percent. And shipments of big-ticket items fell
for the fourth month in a row--with autos leading the way.
(Associated Press, Feb. 27)
Federal Reserve Board Chair Alan Greenspan admitted on
Feb. 28 that there is a "retrenchment" which "has not played
itself out" as a result of "capacities built up in 1999 and
early 2000."
Translated into the language of Marxism--i.e., the
language of the working class--this jargon means that
capitalist overproduction is bringing on an economic
crisis.
Poverty mounted before downturn
This economic crisis begins as the level of poverty and
hardship for tens of millions of people is already
rising.
Since the destruction of welfare in 1996, the number of
food stamp recipients has plunged from 24.9 million to 17
million, according to the Agriculture Department. (New York
Times, Feb. 26) Yet the Census Bureau estimates that 3.7
million households experience hunger because they don't have
enough money for food. Many more--9.7 percent of all U.S.
households--are regularly in danger of being unable to afford
their basic food needs.
Lisa Hamler-Podolski, director of the Ohio branch of
Second Harvest, the country's largest food bank, told the
Times that a third of the people coming in for food are
first-time applicants. "They are a new class of people,
mainly working poor, who are running out of resources," she
explained.
Second Harvest "has doubled the amount of food it
distributes to 2 billion pounds in the last two years,"
according to National Director Douglas O' Brien.
While hunger is rampant, food producers and restaurants
waste 80 billion pounds of food a year because it cannot be
sold at a profit.
In a recent article on homelessness in New York, Martin
Osterreich, head of the city's Department of Homeless
Services, said that the number of people applying to shelters
had risen by 25,000 since the late 1980s. The number of
families applying grew 10 percent in just the last year,
despite tigh ter restrictions. (New York Times, Feb. 8)
Osterreich said this was a national trend. He cited a
25-city survey by the United Conference of Mayors, which
calculated a 17-percent rise in the number of homeless
families applying for help.
Steven Banks of the Coalition for the Homeless told the
Times: "What we're seeing now is that work isn't enough to
keep people out of the shelter system. The $5.15 per hour
minimum wage is not enough to cover rents greater than $700
or $800 a month."
A study of retirement in the Feb. 26 New York Times showed
that there are a million more people over the age of 65 in
the work force today than in 1985. "Their employers have cut
back or eliminated health insurance for retirees," wrote the
Times.
"The tendency in recent years for employees to move from
job to job has kept some people from building up much of a
pension anywhere. And many employers have eliminated
traditional pensions."
Dain Savage of Watson Wyatt Worldwide, which advises
companies about pension plans, said: "I was speaking to
someone yesterday. His premium for medical insurance was
going to be $100 more than his pension payment. He said he
had been doing hard physical work for 20 or 30 years, and I
think otherwise he'd have liked to quit."
This is the capitalist system. It has no use for anybody
it can't exploit--particularly older workers, youths, and
people who were driven into poverty and unemployment by the
profit system. And for those it can exploit, capitalism has
no mercy.
The workers' labor can make all of the corporations filthy
rich. But when profits begin to shrink because production has
outstripped consumption, the bosses toss the workers out the
door.
All this accumulation of poverty and suffering has taken
place during a period of capitalist boom. Now that a crisis
is in the making, the workers must band together with the
communities and fight to stop layoffs, repossessions and
evictions and to demand food, housing and income for those
with no jobs and no homes.
Working-class struggle is the only answer to the
capitalist crisis.
This article is copyright under a Creative
Commons License.
Workers World, 55 W. 17 St., NY, NY 10011
Email: ww@workers.org
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