Bush defends economic record
The Bush administration defended its economic record on Friday, following a report that showed the economy lost 4 000 jobs in August, the first job loss in four years.
In a fact sheet issued from Sydney, Australia, where President George Bush is attending an economic conference, the administration said that the tax cuts enacted in Bush’s first term in office were “helping keep our economy strong, flexible and dynamic”.
However, Democratic critics contended that the loss of 4 000 jobs resulted in part from a steep downturn in housing and a spreading credit market crisis and provided further examples of how Bush’s mishandling of economic problems was harming average Americans.
“Alongside continued weakness in wages, healthcare and housing, today’s disappointing jobs number is only the most recent indication that the Bush administration’s simplistic supply-side economic strategy is not working for working Americans,” said Senator Hillary Rodham Clinton, who is running for the Democratic presidential nomination.
Jobs: The administration said that the economy has created 8,22-million jobs since August 2003 despite the fact that payroll jobs edged down by 4 000 in August. The administration said the unemployment rate remained unchanged at 4,6%, below the average of each of the past four decades.
Growth: The administration also said in the fact sheet that the overall economy, as measured by the gross domestic product, grew “at a strong 4% annual rate in the second quarter” and the economy has now experienced nearly six years of uninterrupted growth, averaging 2,7% a year since the recession ended in November 2001.
Taxes: The administration also said that “since the president’s tax relief was implemented, the resulting strong economy fuelled record levels of tax revenue that will help balance the budget by 2012”.
Jobs: The economy has created 8,22-million jobs since August 2003.
But the administration does not mention that from January 2001 when Bush took office until August 2003, the economy lost 2,65-million jobs, a consequence of the brief 2001 recession and lingering labour market weakness that did not end until the summer of 2003. The unemployment rate is the lowest in recent decades, but overall job creation during the current economic expansion is the weakest of any of the recoveries since World War II.
Growth: The economy did grow at a 4% rate in the April-June quarter but that rebound followed a full year of sluggish activity, reflecting in part the worst slump in housing in 16 years. Because of the continuing troubles in housing and spreading problems in credit markets, many economists believe growth in the current quarter and the final three months of this year will be just half the second quarter pace. Some private economists are worried about an outright recession
if the Federal Reserve does not soon cut interest rates. The 2,7% average GDP growth rate during this expansion compares to an average of 4,3% for all expansion periods since World War II.
Taxes: Democrats and Republicans disagree on the impact of the Bush tax cuts. Republicans contend that the tax cuts were well timed and helped lift the country out of the 2001 recession. Democrats argue that too much of the tax relief went to the wealthy and provided very little economic stimulus. Most private forecasters believe Bush’s projection that the budget will be balanced in 2012 is based on overly optimistic assumptions. - Sapa-AP