Bush Plan Deepens Debt

BIRMINGHAM, AL — President Bush's proposed economic plan will offer 92 million taxpayers an average tax cut of $1,083 and create 2.1 million jobs over the next three years. But a UAB (University of Alabama at Birmingham) economist cautions that the plan likely will have a detrimental impact on government finances.

January 8, 2003

BIRMINGHAM, AL - President Bush's proposed economic plan will offer 92 million taxpayers an average tax cut of $1,083 and create 2.1 million jobs over the next three years. But a UAB (University of Alabama at Birmingham) economist cautions that the plan likely will have a detrimental impact on government finances. "There is a danger of higher government debt," says economics professor S.D. Lee, Ph.D. "Businesses may be able to sell more stock and get easier financing to expand and create more jobs, but it also will mean more deficit spending especially if we go to war. This could have an impact for many years to come." A similar situation arose during the Reagan administration. There were two tax cuts but military spending continued, which left a huge deficit until the Clinton administration balanced the budget.