Dismal Long-Term US Economic Picture

Bush Administration Trying to Put a Positive Spin on a Really Dismal Long-Term US Economic picture

Some of the disturbing economic indicators:

*The budget office has estimated that deficits for the decade ending in 2013 would total nearly $2.4 trillion. Last year August the report called for deficits totaling $1.4 trillion over 10 years.

*According to the Associated Press, a non-partisan Congressional Budget Office study found that "the tax cuts and other policies President Bush proposed in his $2.4 trillion budget would probably have a minimal impact on the economy." While the agency stated that Bush's proposal "could either increase or reduce economic output through 2009, and improve it in the following five years," the study concluded that "the differences are likely to be small, affecting output by less than one-half of one percentage point." The effect of Bush's tax cuts and proposed budget are still unclear, and many leaders are demanding immediate and effective action. AP quoted Sen. Kent Conrad, the top Democrat on the budget panel, who described Bush's policies as "truly dangerous to the economic security of our country ... we have a responsibility to alter that course."

*Bush and his administration officials have said their budget will propose cutting the deficit to half of this year's level by 2009, but so far revealed no details of how they would achieve that. Without the proper plan it is obvious that even deeper deficits can be expected when baby boomers retire in force just beyond a decade from now.

*During the first three years of the Bush-Cheney administration, the unemployment rate increased by one-third and 2.2 million jobs were lost, and the country has gone from a $281 billion surplus to a $521 billion deficit. Debt has increased 23% from $5.7 trillion, to $7 trillion. Bush recently restated his pledge to create 2.6 million jobs, stating "5.6% unemployment is a good national number." However, the New York Times recently uncovered a White House report indicating that the president is considering reclassifying low-paid fast-food jobs as higher-paid manufacturing jobs to make it appear like the unemployment rate is going down.

*When speaking with a group of women small business owners, Bush said that "unemployment dropped to 5.7 percent," claiming that this "is a positive sign that the economy is getting better." Unfortunately, according to the Baltimore Sun, that is not the case. The Sun reported that underlying that positive number was "grim economic news—only a handful of new jobs were created and hundreds of thousands of discouraged people dropped out of the workforce."

*The New York Times reported that the Bush tax cuts and the Medicare changes enacted this year alone will increase the national debt by $750 billion over the next decade. If the tax breaks are extended as expected, the total comes to $1.25 trillion over the the next ten years. Robert L. Bixby of the Concord Coalition, a bipartisan budget watchdog organization, told the Times, "In fiscal terms, there is no doubt in my mind that this has been the most irresponsible year ever." Goldman Sachs economist Ed McKelvey stated in his firm's newsletter that "the U.S. federal budget is out of control." The $374 billion dollar budget deficit in the fiscal year that ended on Sept. 30, which was by far the largest dollar amount ever, is expected to rise to $525 billion in this fiscal year. Should that be the case, the Times reports that "the annual budget picture will have deteriorated by more than $650 billion" during Bush's term as president, from a surplus of $127 billion in fiscal year 2001. Senate Minority Leader Tom Daschle (D-S.D.) criticized the Republicans' budget record saying that "they have passed an irresponsible fiscal policy starting with tax cuts and now loaded with giveaways." Worse yet are the forecasts for the future. Critics of the administration's budget policies say that "the problem is not so much deficits today as those in years to come."

*While George W. Bush has been touting good news on the economy, the picture is not quite so rosy, especially for the long term. The Boston Globe reports that recent economic growth is not "merely a lucky accident." According to the Globe, Bush's enormous military and security spending, and two of the largest tax cuts in the nation's history are likely to result in "short-term growth and long-term damage." The Globe describes the economic policies of the Bush administration as a "crude and destructive cocktail of stimulants." Even if the recent positive economic signals temporarily take hold, "the administration's policies will weaken the economy over time, fall particularly harshly on its working middle- and low- income citizens, and fail to prepare the nation for a century of far more intense global competition."