Religions > Atheism > Hanoi John Kerry is blaming Bush for Clinton's mess (which Bush, by the way, has fixed).
| Topic: |
Religions > Atheism |
| User: |
"Yang torresD Bang" |
| Date: |
08 Apr 2004 08:39:51 PM |
| Object: |
Hanoi John Kerry is blaming Bush for Clinton's mess (which Bush, by the way, has fixed). |
Hanoi John Kerry is blaming Bush for Clinton's mess (which Bush, by
the way, has fixed).
March 05, 2004, 9:02 a.m.
Recession Politics
Kerry is blaming Bush for Clinton's mess (which Bush, by the way, has
fixed).
By Cesar Conda
NRO
In a recent speech, John Kerry declared, "[President Bush] inherited
the strongest economy in the world - and brought it to its knees."
There is no evidence to support this claim. In fact, the evidence now
suggests that President Bush inherited a recession.
A key issue this election season - one which some observers believe
will determine the outcome of the presidential election - is whether
the recession began in the last quarter of 2000 or during the first
months of the Bush presidency. Granted, even if the truth is that the
recession began in the days after George W. Bush's inauguration, most
reasonable people would conclude that a president cannot on a dime
turn a $10 trillion economy one way or the other. However, data and
supporting analyses from economists indicate that the recession began
well before Bush took office, making political criticism of the
president on the jobs issue even more inappropriate.
According the National Bureau of Economic Research (NBER), the
unofficial arbiter of business cycles, the recession began in March
2001 and ended in November 2001. NBER analyzes four data series from
the U.S. Department of Commerce, the Federal Reserve Board, and other
government sources. While previously NBER indicated the recession
started in March 2001 (it has not formally revised that date),
official revisions of the data indicate that the recession started
earlier than that.
For example, under revised calculations, real disposable income peaked
in October 2000, rather than steadily rising in 2000 and early 2001 as
indicated in the original data. Industrial production/manufacturing
and trade sales both peaked in June of 2000, instead of September and
August, respectively. Non-farm payroll employment peaked in February
2001, not March 2001. And monthly gross domestic product, which the
NBER recently announced will be included in dating recessions, also
peaked in 2000.
According to the Council of Economic Advisers, the median date of
these five data series is October 2000 - at least three months before
George W. Bush took office. We also know that the stock market started
to decline in March of 2000, business investment began to fall in the
third quarter of 2000, and initial jobless claims began to rise at the
end of 2000 - more evidence that the U.S. economy in late 2000 was in
fact "on the front end of a recession," as Vice President-elect *****
Cheney observed on Meet the Press on December 3, 2000.
Senator John Kerry and other Democratic party leaders ignore or gloss
over these facts. However, even professor Joseph Stiglitz, the
chairman of the Council of Economic Advisers under President Clinton,
admits that "the economy was slipping into recession even before Bush
took office, and the corporate scandals that are rocking America began
much earlier."
To be sure, the Federal Reserve's twelve-month tightening cycle that
began in mid-1999 contributed to the economic slowdown. It is also
true that cyclical forces in the economy led to the type of business
retrenchment that we have seen in the past and that will likely always
be seen to some extent in a market economy. But a significant
contributing factor in the slowdown was the policy direction of the
Clinton administration, which included an aggressive use of antitrust
regulation in the high-tech marketplace, a lack of a national energy
policy which resulted in energy-price spikes, and a high and rising
federal tax burden.
A key area in which presidents can have an impact on the economy is
tax policy. President Clinton raised tax rates right after taking
office in 1993, and presided over a massive "stealth tax hike" which
ultimately hurt the economy. Because income taxes were not indexed,
the increase in real incomes during the 1990s pushed people into
higher and higher tax brackets. According to Brian Wesbury of GKST
Economics in Chicago, from 1993 to 2000, the number of people who paid
taxes in one of the top three income-tax brackets almost doubled from
3.4 million to 6.4 million filers. Further, total income taxes paid by
these filers increased from $84.6 billion in 1993 to $245.8 billion,
an increase of 190.5 percent. President Clinton's policies increased
the federal tax burden as a share of our national economy from 17.5
percent in 1992 to 20.9 percent in 2000.
President Bush, however, took the opposite approach of his
predecessor. Upon taking office, George W. Bush took immediate action
to lift the tax burden and strengthen the economy. The first Bush tax
cut put $40 billion immediately back into the economy in mid-2001 and
helped cushion the economic fallout from the 9/11 terrorist attacks.
In March 2002, the president signed a second tax cut that allowed
partial expensing, which began the recovery in business-investment
spending. In May 2003, Bush signed the third tax cut of his
administration, boosting after-tax economic incentives by slashing tax
rates on income, capital gains, and dividends.
Largely as a result of the president's tax-rate cuts, the recovery has
moved into higher gear. The economy grew 6.1 percent in the second
half of 2003, and 4.3 percent over the four quarters of 2003 - well
above potential GDP growth. Business fixed investment in the fourth
quarter of 2003 was revised upward to a 9.6 percent annual rate from
6.9 percent. The stock market has now returned to the level it was at
when President Bush took office, which means that all the losses that
occurred since March 2000 happened under President Clinton. In
January, the economy generated 112,000 new jobs - the largest monthly
increase since December 2000 - and 366,000 jobs have been added over
the last 5 months. The unemployment rate has declined from 6.3 percent
in June 2003 to 5.6 percent in January of this year, the fastest
seven-month decline in nearly a decade.
And its not just supply-siders lauding the Bush tax cuts. Goldman
Sachs economist Edward McKelvey, an early skeptic of Bush tax policy,
now concludes, "they definitely had a stronger impact on spending than
we anticipated." The Wachovia Economics Group reports that the
"economic data provide support for the case that the midyear tax cut
did take the economy up a notch. There is no need to resort to
esoteric data or the torture of innocent economic statistics. The data
are clear in their verdict" [emphasis added]. And International
Monetary Fund economist Magda Kandil says the president's plan "is
directly targeting consumer spending and investment incentives ... The
end of double taxation of dividends and increasing incentives for
small businesses should help sustain momentum in favor of job creation
and long-term growth."
While armchair quarterbacking is fun for politicians, voters
increasingly want to know what John Kerry would do to "create jobs."
His solution, it appears, is to raise income-tax rates on job-creating
small-business owners, roll back the tax cuts on investor capital
gains and dividends, and cancel the scheduled elimination of the death
tax. In the first presidential debate a reporter should ask John
Kerry: "How will increasing taxes on those most likely to save, to
invest, and to employ people create jobs in America?" His answer will
tell Americans much about his own vision of America's economic future.
-- Cesar Conda, formerly assistant for domestic policy under Vice
President ***** Cheney, is a board director at Empower America and a
principal at Navigators LLC, a Washington-based consulting firm.
.
|
|
|
Related Articles |
|
|
