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Some conservatives are alleging that the president suffers from an inability to communicate with the American people, and there may be some overrated truth to this. But in a news conference last Friday, we saw George W. Bush at his communicating best. Following a meeting with his economic advisors at Camp David, the president let er rip, stating that The foundation of our economy is solid, and its strong. Because of the tax cuts we passed, American workers and families and small businesses are keeping more of the money they earn. And theyre using that money to drive this economy of ours forward.
Could he be any clearer?
The mainstream media wont report the economic good news. And many on Wall Street dont even want a strong economy, for fear of more rate hikes from the Federal Reserve. The day after the presidents Camp David message, the New York Times editorial cried Hold the champagne, and proceeded to obsess about a slowdown in housing.
Theres no counting how many recessions Times columnist Paul Krugman has predicted, but Bush was exactly right to point out 4 percent real GDP growth during the first half of 2006, brisk productivity rates, 5.5 million new jobs over the past three years, and a historically low 4.8 percent unemployment rate.
Bushs critics say hes whistling past the graveyard. But the president rightly insists that The entrepreneurial spirit in the country is strong, and thats good for America.
Bush inherited the Internet bubble-meltdown from the Clinton years, as well as the corporate scandals. Then came the attacks of 9/11 and the ensuing war. But the Bush recovery also followed suit, the result of slashing high marginal tax rates on investment in mid-2003.
And the recovery continues. Recent strong numbers for retail sales and industrial production suggest a 3.5 percent economic growth rate in the second half of 2006, a far cry from soft-landings, hard-landings, or the recession scenarios that are beginning to proliferate.
And when the president says economic growth has had a positive impact on the budget, hes right again. Tax receipts are growing around 14 percent for the second straight year, the biggest gain in a quarter of a century. Income-tax collections, bolstered by the success of owner-operated business entrepreneurs and other self-employed, are helping lift these revenues. These folks, who prefer unincorporated Subchapter S or limited-liability company partnerships, are the ones who show up in the household survey of employment which is at a record high.
Meanwhile, non-withheld revenues from lower-taxed capital gains and dividends are paying for themselves. Total tax receipts in 2006 will come in around $2.4 trillion, roughly $400 billion above the tax-collection peak of 2000.
The Congressional Budget Office may now acknowledge that deficit projections were $100 billion too high, but they maintain that only higher taxes in the next ten years will solve the budget problem. This defies common sense. If it pays less to work and invest after-tax, as implied by the CBO scenario, does anyone truly believe people would work harder to expand the economy? If that were the case, then why not raise tax rates back to 70 percent, where Reagan found them, or 91 percent, where JFK first had them? The CBOs thinking begs credulity.
Yes, $3 gas at the pump has cut into the economic success story. Our biggest economic challenge has been higher energy prices, itself largely a function of the worldwide spread of capitalism and low tax rates that has led to strong global growth. But the heavyweight energy story could be lightening up.
At high prices and profits, market forces are generating more production and less consumption. For the first time in fifteen years, the number of oil wells drilled in the U.S. has surpassed the 1,000 mark. The rotary rig count is up 23 percent from a year earlier. Total exploration and development is 30 percent higher than last year. Unleaded gasoline futures have been dropping, suggesting relief at the pump.
Meanwhile, bond rates are coming down as the Fed removes excess liquidity to stop inflation. Mortgage rates are now declining, with Wall Street economist David Goldman noting that home prices actually increased slightly in the second quarter after falling in the first. Much of the housing slack will be taken up by the highly profitable business sector, as resources shift from residential construction to a new boom in commercial and corporate building. Stock markets, by the way, continue to rise, and are within shouting distance of five-year highs.
All this is not to say that the president doesnt have a problem with the Iraq war. He does. But on the low-tax economy, Mr. Bush has the story right.
Low tax-rates, strong economic growth, and shrinking budget deficits its still the greatest story never told.
Could be. Then again, the Iraq War, The Afghanistan War, the Lebanon War all count too. Couldn't he be a bit more articulate, not too mention decisive regarding these 'battles' that should have been replaced for wars?
They are losing propaganda and really, focus.
I have always been frustrated about that!!
BS, not trying to kudo Conley, but when US troops are in harm's way, tax cuts just count zippo. F that. Seriously.Tax cuts work every single time.
They worked for JFK. They worked for Ronald Reagan. They are working for Geroge W Bush
Liberals need to read and LEARN Economics 101
Personal misgivings about how the media overestimates the control presidents hold over the economy (Clinton is given too much credit for the late 90s boom, Bush caught too much crap for the bad economy of the early 2000's, etc) , I think I'm with Kathianne here.Kathianne said:BS, not trying to kudo Conley, but when US troops are in harm's way, tax cuts just count zippo. F that. Seriously.
Spouting right wing agenda in a thread regarding troop strengh, effectiveness, and deployment on anything other than troop related is wrong.
Tax cuts work every single time.
They worked for JFK. They worked for Ronald Reagan. They are working for Geroge W Bush
Liberals need to read and LEARN Economics 101
Another thread to prop up Junior's failure. The question here is can spending through the roof and choking off money that can lower the deficit be sustainable? To answer that question quit your job and spend like crazy. How long you last should give you the answer.
Junior's economic policy amounts to nothing more than dumping a major problem onto the next generation. Only Junior can be shitty like that.
Tax cuts work every single time.
They worked for JFK. They worked for Ronald Reagan. They are working for Geroge W Bush
Liberals need to read and LEARN Economics 101
Good question. I find it humorous that he espouses that others should learn ECON 101. To this point, the subject of Economics to him is entirely political. He has yet to comprehend the monetary science part of the equation, which is crucial to our economic system and how it functions.Why does RSR never stick around once he gets challenged?
