Sunday, May 06, 2007

Give Bush Credit for the Great Economy

When President Bush entered office our economy had entered a recesseion due to the bursting of the "Tech bubble." Then the attacks of 9/11 dealt a body blow to the economy and direct costs for increased security. You could expect that we entered a slump and stayed there. But the economy started running on all cylinders and now is as good as ever.

Repeat. The US economy is as good as ever!

Investors Business Daily:

An IMF study reckoned that 9/11 cost the U.S. economy about $75 billion in lost GDP — not counting property losses of well over $100 billion. The U.S. also incurred future yearly costs of roughly 0.75% of GDP to pay for greater security, another big hit.

No question: The year 2001 marked a major break for the economy, with one of the largest hits ever to the wealth of Americans.

It could have been an epic disaster. But it wasn't. Bush did exactly the right thing — though he's still criticized for it today. To get the economy moving again, he pushed through tax cuts in 2001, 2002 and 2003.

Some 113 million people got an average tax cut of $2,216. Families with children got even more — $2,864 on average.
Since the last round of cuts in 2003, we've had the quietest, and most significant, boom in wealth, income and profits in our history. This explains why the economy, to the surprise of economists and the chagrin of liberal pundits, keeps humming.

We've gone over the numbers before, but they bear repeating. Since 2002:
• Real gross domestic product has soared $1.64 trillion, or 16.5%, during a five-year stretch that has yet to see a downturn and that has witnessed average annual growth of 3%.

• Disposable personal income — what's left after taxes — has jumped $2.16 trillion, or 29%, to $9.68 trillion.

• Productivity, the fuel for future standards of living, has improved 14.3%.

• Overall employee compensation has expanded 4% a year.

• Net wealth, the amount people would have after paying off their debts, has swelled $15.2 trillion, or 38%, to $55.6 trillion. That gain in just five years is more than the total wealth amassed in the first 210 years of America's existence — an unprecedented surge.

• About 69% of Americans now own their homes, an all-time high.

• The jobless rate, now at 4.4%, remains below its 40-year average. Since August 2003, 7.8 million new jobs have been created.

• Tax receipts have surged 43%, or $757.6 billion, again thanks to economic growth.


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