Bush Records Gigantic Deficit
George W. Bush will have more debts in 2003 than any US president before him. According to official prognoses, the budget deficit may reach $455 billion - astonishingly $165 billion over the previous record set by Bush's father.
[This article published in Spiegel Online, July 15, 2003 is translated from the German on the World Wide Web, http://www.spiegel.de/wirtschaft/0,1518,257218,00,html.]
The financial situation will be even worse next year according to official estimates of the White House. The deficit could be $475 billion in fiscal year 2004 that begins in October. In 2008 the Bush administration expects a shortfall of $226 billion.
The administration posted a new debt record and missed its previous prognoses. The deficit is around 50 percent above estimates published by the Bush administration five months ago. A week ago an economist calculated that the budget hole could be around $50 billion smaller than now assumed. The deficit is now 4.6 percent of the gross domestic product - a level that would violate the rules of the EU (European Union) stability pact.
The initial costs of the Iraq war are included in the current estimates. The wars in Afghanistan and Iraq at $4.8 billion a month cost more than expected. When the war broke out, the Congress approved an extraordinary amount of $79.2 billion. $42 billion are for this budget year.
"What is the cost when a country is attacked?"
The highest US deficit of $290 billion was recorded in 1992 in the term in office of George H.W.Bush, the father of the current president. The democrats criticized the catastrophic dimensions of the deficit. They put responsibility on the tax cuts of the Bush administration. The prognoses even shocked republican senators.
The government side has tried to relativize the data. Measured by the gross domestic product, this is not a record. In the Reagan era, the deficit was smaller in absolute numbers but amounted to six percent of the gross domestic product. Officially it is said, the weakness of business activity is responsible for budget problems. On account of economic weaknesses, the government collected less taxes last month June 2003 than in 1999.
Speakers point out that expenses for defending the country after the attacks on September 11, 2001 are inevitable and important. Presidential spokesperson Ari Fleischer intimated that not investing in defense and military actions could be far more expensive for the US. Fleischer asked rhetorically "What did September 11 cost us? What is the cost when a country is attacked? What would be the price that the American people must pay if something like this happens again?"