War Criminals

[John Young]

Paul Krugman, Economic Columnist, New York Times, 24 October 2001:

At worst, war bonds will offer a lower return than ordinary bonds. 
And if some people buy them nonetheless, what will they finance? 
Here's where that tax bill enters the picture. The remarkable thing 
about the 'stimulus' package that passed the Ways and Means 
Committee on a straight party-line vote is that it barely even pretends 
to serve its ostensible function. It consists largely of permanent tax 
cuts, not the temporary cuts that you would expect in a stimulus 
package. It systematically gives money to those least likely to 
spend it, that is, to high-income taxpayers, and above all to large 
corporations. 

Some of the provisions in the House bill are simply mind-boggling. 
For example, there is a large *retroactive* tax cut for corporations 
that would lead to immediate rebates of hundreds of millions of 
dollars to *each* of a select list of giant companies, many of them 
in the energy industry (though the $1.4 billion check to I.B.M. would 
top the list). 

On the other hand, there is almost nothing in the bill for people who 
might actually need more money. The extra unemployment benefits, 
in particular, are far less generous than those offered in the last 
recession, when the elder Bush was president. The bill, in short, 
looks as if it was written by corporate lobbyists -- and it probably 
was. Even Treasury Secretary Paul O'Neill was evidently 
embarrassed by the bill, dismissing its more outlandish 
components as 'show business' designed to impress campaign 
donors.

But his remark was naove. Those lobbyists are serious men, who 
are paid by their employers to deliver results, not gestures; they 
wouldn't have put those provisions in unless they thought they 
had enough power to get them enacted. And sure enough, the 
White House soon contradicted Mr. O'Neill; the president, 
declared Ari Fleischer, was 'very pleased' with the House bill. 

Which brings us back to those war bonds. The government not 
only isn't calling for shared sacrifice; it is 'very pleased' with a 
proposal to give billions in handouts to corporations. And in that 
case, what is someone who buys a war bond really helping to 
finance? Put it this way: If the House has its way, the government 
will give far more in tax breaks to corporations over the next year 
than it will spend fighting terrorism. Yet somehow one suspects 
that people would not rush to buy 'corporate tax-cut bonds.'