By Seth Shamban, 16, North Hollywood HS
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There is a massive problem with the economy. Unemployment is at its highest level in 30 years, states are scrambling to balance their budgets and Americans are cautious about spending their dollars. The economic outlook is grim, and economists don’t see an end in the near future. Meanwhile the president is trumpeting a war that could cost America hundreds of billions of dollars. His only cure for the economy is a massive income tax cut.

Many economists feel that returning tax dollars to those that paid them is a good way to stimulate the economy. It affords Americans extra money to purchase items and pump money into the marketplace. Some economists feel that tax cuts make the biggest impact when they are made to benefit the average American. Bush’s proposal benefits the wealthiest Americans the most.

In his State of the Union Address, the president promised that 92 million Americans will each save $1,000 as a result of his tax cut. But that figure is misleading. If you divide all Americans into five earning groups, according to the Urban-Brookings Tax Policy Center, a family in the middle fifth would save only $260 a year on their taxes. Those in the second richest group would save a mere $574. The top 20 percent of Americans would reap the majority of the benefits from this tax cut, with tax breaks that could be in the tens of thousands of dollars. Bush hid this fact by averaging the savings of 92 million Americans, allowing the massive tax cuts to the wealthy to skew the figures.

Paul Krugman, an economics professor at Princeton University, said that the wealthy will likely put their tax cut dollars in savings or investments. Consequently, the income tax cut will not benefit the economy in the short term. Instead the tax cut will plunge the United States further into debt, as unemployment rises and government programs are, like taxes, slashed.

Yee-haw, it’s off to war!

But when the economy is in shambles, there is no better place to go than war. Bush, our lovable cowboy of doom, wants to launch a war of liberation and disarmament in Iraq that will cost at least $100 billion, according to some estimates. Yet Bush’s budget has no war-related expenses in it.

How will Bush finance a war at a time when the budget deficit is rapidly rising, and taxes, the major source of revenue for the U.S. government, are being slashed? He will cut government programs—programs which, unlike the tax cut, would actually help the needy. As the majority of Americans receive less and less of what they need from the government, they will have to spend more and more to get it from private businesses, which will lead to less pocket money for those that would actually spend the money in their wallets.

Japan’s economic future once looked bright. It was the center of the booming technology market. Its corporations were penetrating the U.S. market with products that were cheaper and more reliable than American products. Beginning in the 1980s, however, Japan faced more competition from Europe and Asia, high unemployment, a massive rise in the cost of goods, such as food and oil, and a general economic and societal epidemic that led it into a decade long recession.

The United States currently displays similar characteristics: rising unemployment, slowed growth, rising gas prices and falling consumer confidence. Only swift, informed economic policies can alleviate these ills. Unfortunately, the Bush administration’s revolving slate of economic advisors fall prey to the beliefs of the tycoon cabinet, Bush’s advisors, and the president himself.

George Walker Bush, a graduate of Yale University and Harvard School of Business, is a firm believer in trickle-down economics. That’s the belief that by giving benefits to the wealthy, it will eventually trickle down to everyone in a society. If he does not abandon this economic theory, which led to the downturn in the economy under Ronald Reagan, there will be nothing to trickle down. Money can buy many things, but it cannot buy sound economic policy.