BUSH'S economic policies have finally paid off: The Labor Department announced last week that 308,000 new jobs had been created in March, the largest increase since April 2000.
Democrats who like to place all of the blame on Bush's fiscal policies seem to forget several other factors that contributed to the economic downturn during his first few years in office. First, he inherited recessionary conditions. The economy was taking a bit of a nosedive when he first stepped into office.
Second, the attacks of Sept. 11 were something no one could have predicted or planned for; they completely shut our nation down for several days. Many industries suffered as a result, such as airlines, restaurants and hotels, which had a devastating impact on many businesses.
Then various scandals rocked the financial world. While the number of scandals was relatively few (given the vast number of companies that don't cook their books), the repercussions were enormous.
The Democrats attempt to paint a dismal picture of the economy. However, this simply isn't the case. Under the Bush administration, the economy grew by leaps and bounds in the last two quarters of 2003 (fastest in 20 years). GDP grew at an unprecedented 8.2 percent in the third quarter of 2003. Home ownership rates are at an all-time high, as are manufacturing rates. Also, a segment of the population that isn't accounted for in the unemployment figures is the number of entrepreneurs, which is on the rise.
Unemployment is usually a lagging indicator. Last June, it was 6.3 percent, and last month it was 5.7 percent (admittedly, a .1 percent increase from February, but only because more people reported reentering the job market to look for work). In the end, it is predicted that Bush will just about break even in terms of jobs created under his watch (currently about 1.8 million have been lost). Co-host of CNBC's Kudlow & Kramer and CEO of Kudlow & Co. Lawrence Kudlow wrote in a column in Tuesday's Investor's Business Daily, "At this pace, roughly 2 million new jobs could appear in 2004, a number that is certainly within shouting distance of the 2.6 million new jobs originally predicted by chief Bush economist Greg Mankiw."
According to the household survey, a questionnaire collected by the government from 50,000 households, 978,000 jobs have been created in the last eight months, and if this trend continues, which for the foreseeable future it will (barring any earth-shattering events), the economic recovery will be an enormous accomplishment given the circumstances.
Economics Prof. Lee Coppock commented, "I do believe that the economy will continue to add jobs through this year. Investment has been rising, which indicates that firms believe the economy will be growing."
That's pretty good in my estimation for a president who was handed a recession, was faced with the most devastating event on the U.S. economy in recent history and held office when the scandals of the dot-com era finally came to light.
Bush's tax cuts played a huge factor in boosting the economy. His stimulus package is based on the fundamental idea that people should keep more of their money, because, after all, it is their money. While Democrats view tax cuts as lost revenue and complain about the need for pay increases, another view might help to put this in perspective: Tony Snow quipped on his new radio show, "Think of tax cuts as federally mandated pay raises."
Democrats challenge that his tax cut was a tax cut for the wealthy, but that is simply not the case. Marginal tax rates were lowered in all income brackets. The tax cuts reduced the percentage of income that all taxpayers had to fork over. Proportionally, the tax cut was beneficial to all income earners of all levels. However, you have to take into account that the top 5 percent paid 53.25 percent of the tax burden according to 2001 statistics from the IRS, so in monetary terms this bracket has received more of its money back because it pays considerably more.
Sen. John Kerry is trouncing Bush on his outsourcing policies. While the politics of this do not play heavily in Bush's favor, a substantial case can be made for the long term benefits of outsourcing. The American Electronics Association recently published a report about outsourcing, indicating that jobs lost to outsourcing is not nearly as colossal as previously thought. Also, foreign investment in the United States is likely to outweigh the business that domestic companies are exporting to foreign countries. The report stated, "Contrary to conventional wisdom, more manufacturing foreign direct investment flows into the United States than U.S. manufacturing investment flows abroad."
Kerry's plan? He claims that 10 million jobs will be created with his unannounced strategy. I'll believe that when I see it, and hopefully, he won't have that opportunity anytime in the near future.
Whitney Blake is a Cavalier Daily associate editor. She can be reached at wblake@cavalierdaily.com.
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