# How's the 'Bush Economy' doing now? **URL:** \ **Category:** Great Debates\ **Created:** [July 30, 2005, 1:27am UTC](https://boards.straightdope.com/t/hows-the-bush-economy-doing-now/314834 "2005-07-30T01:27:42Z")\ **Posts on this page:** 20\ **Page:** 2
**Author:** ![Snowboarder\_Bo](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/snowboarder_bo/32/229_2.png) [@Snowboarder\_Bo](https://boards.straightdope.com/u/Snowboarder_Bo)\ **Post date:** [July 30, 2005, 5:11pm UTC](https://boards.straightdope.com/t/hows-the-bush-economy-doing-now/314834/21 "2005-07-30T17:11:43Z")
> [@Sam Stone](#): > > No, the deficit last year was $412 billion. This year’s is now forecast to be $333 billion, or about 2.7% of GDP. Last year, the deficit was at 3.6% of GDP. The deficit is now forecast to be half of its last-year high within 3 years. Even with your answer, Sam, I stand by what I wrote in my post. “The deficit” is the total amount of national debt, isn’t it? All you are talking about is the amount the deficit **increases** each year. But adding $412B one year and adding $333B the next year _does not_ decrease the deficit. You are talking about a reduction in the increase of the overall deficit, not an actual reduction in the deficit. Now, if one year we added $400B to the deficit and the next year we paid off $300B (or we added -$300B), that would be a reduction of the deficit. Or am I missing something? ---
**Author:** ![Sam\_Stone](https://avatars.discourse-cdn.com/v4/letter/s/ecccb3/32.png) [@Sam\_Stone](https://boards.straightdope.com/u/Sam_Stone)\ **Post date:** [July 30, 2005, 5:29pm UTC](https://boards.straightdope.com/t/hows-the-bush-economy-doing-now/314834/22 "2005-07-30T17:29:34Z")
> [@Snowboarder Bo](#): > > Even with your answer, Sam, I stand by what I wrote in my post. > > “The deficit” is the total amount of national debt, isn’t it? No, the deficit is the difference between on-budget revenues and expenses in a given year. The debt is the result of accumulated deficits over history. You are correct that the debt will increase each year, but the deficit is decreasing. Basically, you’re just mixing up terms. What you’re talking about is the debt, not the deficit. And it’s been increasing every year like, forever. Even during the best of the Clinton years. ---
**Author:** ![DMC](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/dmc/32/18049_2.png) [@DMC](https://boards.straightdope.com/u/DMC)\ **Post date:** [July 30, 2005, 6:13pm UTC](https://boards.straightdope.com/t/hows-the-bush-economy-doing-now/314834/23 "2005-07-30T18:13:40Z")
> [@Sam Stone](#): > > No, the deficit is the difference between on-budget revenues and expenses in a given year. The debt is the result of accumulated deficits over history. You are correct that the debt will increase each year, but the deficit is decreasing. > > Basically, you’re just mixing up terms. What you’re talking about is the debt, not the deficit. And it’s been increasing every year like, forever. Even during the best of the Clinton years. Sam is correct in the usage of the terms debt and deficit in this case, but his numbers aren’t as rosy as he’s stating. If the projections come true, this will be the first time in the last three years that the deficit (as a percentage of GDP; as a dollar figure, Bush has set records) drops below that of the last two years of the Reagan administration. Even with this current “improvement”, the deficit is higher than any year of the Carter administration. Hardly the milestone of “good times” that some would like us to believe. As John Mace pointed out, Bush is the one who created the high deficit which we’re finally stating to see lower slightly. In the last three years of the Clinton presidency, there wasn’t a deficit. It even carried over to Bush’s first year in office, but dropped hard since then. As for the debt increasing, even in the best Clinton years, he’s also correct, but barely. In Clinton’s final year, the actual debt increased about 18 billion dollars. Our debt this month alone (and the month isn’t over yet) is more than double that, to put things in perspective. The total debt increase during the Bush administration so far is absolutely staggering, and while the deficit is indeed dropping, it’s still nowhere near what I would consider a turnaround, and a complete turnaround is needed before the debt (and its corresponding interest) becomes an insurmountable burden on our future generations. ---
**Author:** ![Jonathan\_Chance](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/jonathan_chance/32/701_2.png) [@Jonathan\_Chance](https://boards.straightdope.com/u/Jonathan_Chance)\ **Post date:** [July 30, 2005, 6:13pm UTC](https://boards.straightdope.com/t/hows-the-bush-economy-doing-now/314834/24 "2005-07-30T18:13:42Z")
Yeah, Bo. You’re confusing the debt with a single-year deficit. A couple of points, Sam… I’d be wary of looking at leading indicators early on. I hate economists playing soothsayer. I realize that’s part of what they’re paid to do. But one that I know best in the world has a button up that says ‘If you lined up all the economists in the world they’d point in different directions’. I realize you’re trying to use economic indicators to determine future benefits but I’m doubtful of the whole system’s ability to monitor fundamental change if such occurs. I’m also a hardcore deficit hawk (none of you are harder, believe me) and it drives me to fits of anger when someone defends deficit spending with the old ‘well, it’s less of the total GDP than it was!’. What you’re assuming there is that an entity (person, corporation, government, Elvis) can continue to borrow indefinitely and that it’s a healthy thing. By defending ongoing and endless deficit spending you appear to be painting over a crack willfully instead of replastering. It makes you look less-than-on-target, if you get me. Show me a budget that actually begins reducing the debt and I’ll be happy. Show me a debt continually growing and I’ll be unhappy. Remember, if we’re going to grow ourselves out of fiscal trouble with supply-side or straightforward Keynesian solutions at some point the government should be running a true surplus and the national debt should be reduced by some amount. Merely restraining the rate of debt increase isn’t enough. ---
**Author:** ![Monocracy](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/monocracy/32/4493_2.png) [@Monocracy](https://boards.straightdope.com/u/Monocracy)\ **Post date:** [July 30, 2005, 6:15pm UTC](https://boards.straightdope.com/t/hows-the-bush-economy-doing-now/314834/25 "2005-07-30T18:15:30Z")
> [@Sam Stone](#): > > You’re not playing fair. The deficit I’m talking about is the on-budget fiscal deficit which has been measured this way for decades. The total increase in debt is something different, Of course, if you pick and choose the way you want to measure it, you can always find a good indicator. The performance of the economy should be judged on what the numbers really mean, not how the government measures them. The total increase in debt is not something different, it is the very definition of deficit. It is how much money the U.S. Government is deficient from one year to the next. > [@](#): > > and if you want to use that figure, then Clinton ran constant deficits as well. Yes, he did. But he was trying… The last year that he was in office, the debt rose by only $24 billion, which was .4% of total debt. Adjusted for inflation, you could say that there was a very small surplus. ---
**Author:** ![Monocracy](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/monocracy/32/4493_2.png) [@Monocracy](https://boards.straightdope.com/u/Monocracy)\ **Post date:** [July 30, 2005, 6:19pm UTC](https://boards.straightdope.com/t/hows-the-bush-economy-doing-now/314834/26 "2005-07-30T18:19:55Z")
After reading **DMC** ’s post i realized i got the numbers slightly wrong. In Clinton’s last year, the debt rose $18B, not $24B, for an increase of about .3%. ---
**Author:** ![DMC](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/dmc/32/18049_2.png) [@DMC](https://boards.straightdope.com/u/DMC)\ **Post date:** [July 30, 2005, 6:35pm UTC](https://boards.straightdope.com/t/hows-the-bush-economy-doing-now/314834/27 "2005-07-30T18:35:30Z")
> [@Monocracy](#): > > After reading **DMC** ’s post i realized i got the numbers slightly wrong. In Clinton’s last year, the debt rose $18B, not $24B, for an increase of about .3%. It depends on when the year ends. 🙂 I was using the fiscal year from end of September 1999 to end of September 2000. Either way, that year’s debt increase was the lowest since the 1968-1969 period, and back then the total debt was only about a third of a trillion dollars, which is less than the deficit has been during certain single years of the Bush administration (yes, different values of the dollar, etc., but it’s still telling). ---
**Author:** ![Liberal](https://avatars.discourse-cdn.com/v4/letter/l/848f3c/32.png) [@Liberal](https://boards.straightdope.com/u/Liberal)\ **Post date:** [July 30, 2005, 6:58pm UTC](https://boards.straightdope.com/t/hows-the-bush-economy-doing-now/314834/28 "2005-07-30T18:58:46Z")
> [@Metacom](#): > > Hehe. One of the items you say people complained about was the rich being benefitted more then the poor, and one of your bullet points is that tax revenue is up, mostly as a result of the rich paying more. Which means they’re more prosperous then ever. 🙂 Supply side tax cuts are certainly working for them! Hear hear, dammit! We cannot declare an economy successful while it’s still producing wealthy people! ---
**Author:** ![squeegee](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/squeegee/32/14537_2.png) [@squeegee](https://boards.straightdope.com/u/squeegee)\ **Post date:** [July 30, 2005, 7:12pm UTC](https://boards.straightdope.com/t/hows-the-bush-economy-doing-now/314834/29 "2005-07-30T19:12:38Z")
> [@Sam Stone](#): > > and under Reagan the largest peacetime expansion of the economy in history began. Wasn’t there a greater expansion during the Clinton years? (And, if so, please no arguing that it somehow doesn’t count. Thanks.) ---
**Author:** ![Metacom](https://avatars.discourse-cdn.com/v4/letter/m/ecae2f/32.png) [@Metacom](https://boards.straightdope.com/u/Metacom)\ **Post date:** [July 30, 2005, 7:24pm UTC](https://boards.straightdope.com/t/hows-the-bush-economy-doing-now/314834/30 "2005-07-30T19:24:08Z")
> [@Liberal](#): > > Hear hear, dammit! We cannot declare an economy successful while it’s still producing wealthy people! Do you have any evidence that the increase in taxes paid by the wealthy is because there’s _more_ wealthy people (i.e., that the economy is “producing wealthy people”), as opposed to people who are already wealthy becoming more so? Our increasing wealth gaps between social classes would lead me to believe that it’s because of the latter, but perhaps you have reason to believe it’s the former? ---
**Author:** ![DMC](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/dmc/32/18049_2.png) [@DMC](https://boards.straightdope.com/u/DMC)\ **Post date:** [July 30, 2005, 7:37pm UTC](https://boards.straightdope.com/t/hows-the-bush-economy-doing-now/314834/31 "2005-07-30T19:37:51Z")
> [@Metacom](#): > > Do you have any evidence that the increase in taxes paid by the wealthy is because there’s _more_ wealthy people (i.e., that the economy is “producing wealthy people”), as opposed to people who are already wealthy becoming more so? Our increasing wealth gaps between social classes would lead me to believe that it’s because of the latter, but perhaps you have reason to believe it’s the former? We actually do “produce” wealthy people (even though it’s a piss poor indicator of a healthy economy), but they are such a tiny minority of the country that it doesn’t really make a big difference to the average American. It’s not an indicator that we’re trending upwards. It’s merely an indicator that those near the top are actually reaching their destination. ---
**Author:** ![Metacom](https://avatars.discourse-cdn.com/v4/letter/m/ecae2f/32.png) [@Metacom](https://boards.straightdope.com/u/Metacom)\ **Post date:** [July 30, 2005, 7:43pm UTC](https://boards.straightdope.com/t/hows-the-bush-economy-doing-now/314834/32 "2005-07-30T19:43:14Z")
Well, right, certainly we are producing some wealthy people. The question is whether new “wealthy” people are responsible for the increase in taxes. ---
**Author:** ![DMC](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/dmc/32/18049_2.png) [@DMC](https://boards.straightdope.com/u/DMC)\ **Post date:** [July 30, 2005, 7:44pm UTC](https://boards.straightdope.com/t/hows-the-bush-economy-doing-now/314834/33 "2005-07-30T19:44:55Z")
Metacom, on rereading your post, I see where you’re coming from. The “production” of wealthy people I mentioned is indeed from one level of what we’d consider wealthy, to a higher level of wealth. ---
**Author:** ![Kimstu](https://avatars.discourse-cdn.com/v4/letter/k/ecd19e/32.png) [@Kimstu](https://boards.straightdope.com/u/Kimstu)\ **Post date:** [July 30, 2005, 7:52pm UTC](https://boards.straightdope.com/t/hows-the-bush-economy-doing-now/314834/34 "2005-07-30T19:52:18Z")
> [@Sam Stone](#): > > Tax receipts up 15% last year, mostly from the rich. This is the biggest annual rise in tax receipts since the early 1980s. But don’t jump to conclusions about this being due to “Bushonomics” tax cut policies. Congressional Budget Office analysts and others say that [there are a lot of different factors involved](http://concordcoalition.org/news/article-storage/2005/kr-050715.htm) in the rise in 2005 tax revenues compared to 2004, including one-time effects such as expiration of some corporate tax breaks and a tax amnesty: > [@](#): > > As chief investment strategist for the Wells Capital Group, a division of San Francisco-based Wells Fargo Bank, James W. Paulsen is a Wall Street heavy hitter. He’s been more upbeat than most of his peers about the economy, but he doesn’t credit supply-side tax cuts for its strength. > > “I am not a big advocate that the tax cuts did much but do believe the economic recovery is strong because of the lagged impact of policy stimuli - monetary, dollar and `fiscal’ stimuli,” he said. > > Translation: The Fed’s policy of low interest rates has provided cheap money to fuel consumption. The Treasury Department’s weak-dollar policy has boosted exports, and the big budget deficits of the past four years have spurred spending and economic growth as well. > > Douglas Holtz-Eakin, director of the Congressional Budget Office, the nonpartisan economic-analysis arm of Congress, said it may take two years before there’s enough data to say with certainty how much the tax cuts sparked today’s revenue surge. > > But he lists several other contributing factors: Executive bonuses and capital gains off last year’s strong stock market are driving up individual income tax receipts; the expiration of special depreciation breaks for corporate investment in equipment led to increased business tax revenues; and aggressive efforts to close tax shelters are yielding more tax dollars. > > Yet another factor is that companies enjoy a one-time tax holiday in 2005 that allows them to repatriate profits made abroad. In other words, this sharp rise could be just a temporary blip rather than a genuine sign of a stronger economy. There is also a lot of doubt about the accuracy of the unemployment numbers, as a [new study on labor market slack suggests](http://www.iht.com/protected/articles/2005/07/18/opinion/edkrug.php): > [@](#): > > Economists who argue that there’s something wrong with the unemployment numbers are buzzing about a new study by Katharine Bradbury, an economist at the Federal Reserve Bank of Boston, which suggests that millions of Americans who should be in the labor force aren’t. “The addition of these hypothetical participants,” she writes, “would raise the unemployment rate by one to three-plus percentage points.” > > Some background: The unemployment rate is only one of several numbers economists use to assess the jobs picture. When the economy is generating an abundance of jobs, economists expect to see strong growth in the payrolls reported by employers and in the number of people who say they have jobs, together with a rise in the length of the average workweek. They also expect to see wage gains well in excess of inflation, as employers compete to attract workers. > > In fact, we see none of these things. As J. Bradford DeLong of the University of California, Berkley, writes on his influential economics Web log, “We have four of five indicators telling us that the state of the job market is not that good and only one - the unemployment rate - reading green.” > > In particular, even the most favorable measures show that employment growth has lagged well behind population growth during the past four years. Yet the measured unemployment rate isn’t much higher than it was in early 2001. How is that possible? The answer, according to the survey used to estimate the unemployment rate, is a decline in labor force participation. […] [A] large number of people have, for some reason, dropped out of the official labor force. > > That’s where Bradbury’s study comes in. […] In fact, because older Americans, especially older women, are more likely to work than they were in the past, labor force participation should have risen, not fallen, during the past four years. As a result, she suggests that there may be “considerable slack in the U.S. labor market”: There are at least 1.6 million and perhaps as many as 5.1 million people who aren’t counted as unemployed but would take jobs if they were available. > > There is both good news and bad news in that assessment. The good news is that the economy probably has plenty of room to expand before inflation becomes a problem (which implies that the Fed’s decision to start raising interest rates was premature). > > The bad news is that it’s hard to see where further expansion will come from. We’ve already had four years of extremely loose fiscal and monetary policy. Tax cuts have pushed the federal budget deep into the red. Moreover, for tax revenues and deficit levels as well as for job creation, we need to look beyond the last couple of years in assessing this administration’s performance. Yes, we have stronger (i.e., non-negative) job creation and more tax revenue now than we did a couple of years ago, but we’re still not back up to pre-Bush levels, and the deficit is still, as other posters have pointed out, running amok. I’d like to see some serious, sustained improvement on more economic indicators before I start cheering for Bushonomics. ---
**Author:** ![Liberal](https://avatars.discourse-cdn.com/v4/letter/l/848f3c/32.png) [@Liberal](https://boards.straightdope.com/u/Liberal)\ **Post date:** [July 30, 2005, 9:13pm UTC](https://boards.straightdope.com/t/hows-the-bush-economy-doing-now/314834/35 "2005-07-30T21:13:43Z")
> [@Metacom](#): > > Do you have any evidence that the increase in taxes paid by the wealthy is because there’s _more_ wealthy people (i.e., that the economy is “producing wealthy people”), as opposed to people who are already wealthy becoming more so? Our increasing wealth gaps between social classes would lead me to believe that it’s because of the latter, but perhaps you have reason to believe it’s the former? I’m afraid that I don’t understand the whole wealth envy thing enough to grasp your question. Also, it’s confusing because I didn’t say anything about more wealthy people as opposed to the same number. I don’t know how many there are. It doesn’t bother me that they’re rich. I mean, we’re not dealing with a zero sum game where there’s X dollars in the pot, and if they take Y dollars, all that’s left for me is X - Y. So, what’s your problem with someone else being successful? ---
**Author:** ![Snowboarder\_Bo](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/snowboarder_bo/32/229_2.png) [@Snowboarder\_Bo](https://boards.straightdope.com/u/Snowboarder_Bo)\ **Post date:** [July 30, 2005, 9:52pm UTC](https://boards.straightdope.com/t/hows-the-bush-economy-doing-now/314834/36 "2005-07-30T21:52:27Z")
debt, deficit… got it… thanks ---
**Author:** ![Sam\_Stone](https://avatars.discourse-cdn.com/v4/letter/s/ecccb3/32.png) [@Sam\_Stone](https://boards.straightdope.com/u/Sam_Stone)\ **Post date:** [July 30, 2005, 9:58pm UTC](https://boards.straightdope.com/t/hows-the-bush-economy-doing-now/314834/37 "2005-07-30T21:58:12Z")
> [@Kimstu](#): > > But don’t jump to conclusions about this being due to “Bushonomics” tax cut policies. Congressional Budget Office analysts and others say that [there are a lot of different factors involved](http://concordcoalition.org/news/article-storage/2005/kr-050715.htm) in the rise in 2005 tax revenues compared to 2004, including one-time effects such as expiration of some corporate tax breaks and a tax amnesty: > In other words, this sharp rise could be just a temporary blip rather than a genuine sign of a stronger economy. This is true of any economy. And besides, the ephemeral nature of leading indicators didn’t stop anti-bush types from posting dire threads every time an economic indicator declined before, did it? There was a lot more reason to cut Bush slack on the economy in 2002 and 2003, what with the loss of the WTC, the collapse of the tourism industry, the popping of the tech bubble, the recession he inherited before he even took office, etc. But that didn’t stop people like Krugman from laying the blame for everything squarely at Bush’s feet. Now that the numbers are looking great, suddenly we need to do flips and twists to attribute it to anything but Bush’s policies. > [@](#): > > There is also a lot of doubt about the accuracy of the unemployment numbers, as a [new study on labor market slack suggests](http://www.iht.com/protected/articles/2005/07/18/opinion/edkrug.php): Studies done by left-wing economists like DeLong and Krugman who have serious axes to grind. Somehow I think I’d get criticized if I posted studies by Larry Kudlow and Cato… ---
**Author:** ![Metacom](https://avatars.discourse-cdn.com/v4/letter/m/ecae2f/32.png) [@Metacom](https://boards.straightdope.com/u/Metacom)\ **Post date:** [July 30, 2005, 10:41pm UTC](https://boards.straightdope.com/t/hows-the-bush-economy-doing-now/314834/38 "2005-07-30T22:41:45Z")
> [@Liberal](#): > > Also, it’s confusing because I didn’t say anything about more wealthy people as opposed to the same number. Yes you did: > [@Liberal](#): > > Hear hear, dammit! We cannot declare an economy successful while it’s still producing wealthy people! To “produce” something is to create more of it; to “produce wealthy people” is to create more wealthy people. ---
**Author:** ![DMC](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/dmc/32/18049_2.png) [@DMC](https://boards.straightdope.com/u/DMC)\ **Post date:** [July 30, 2005, 11:17pm UTC](https://boards.straightdope.com/t/hows-the-bush-economy-doing-now/314834/39 "2005-07-30T23:17:58Z")
> [@Sam Stone](#): > > Now that the numbers are looking great, suddenly we need to do flips and twists to attribute it to anything but Bush’s policies. It’s been pointed out by many in this thread, using all sorts of impartial governmental cites, that the numbers aren’t looking great. The economy is still bleeding pretty badly, but at least we’ve slowed the hemorrhaging somewhat. ---
**Author:** ![flickster](https://avatars.discourse-cdn.com/v4/letter/f/7bcc69/32.png) [@flickster](https://boards.straightdope.com/u/flickster)\ **Post date:** [July 30, 2005, 11:36pm UTC](https://boards.straightdope.com/t/hows-the-bush-economy-doing-now/314834/40 "2005-07-30T23:36:05Z")
> [@Soylent Gene](#): > > _3.7 million jobs created in the last two years_ > > not as good as it seems. To keep pace with population gain, we need to create about 200,000 jobs per month (Clinton averaged more than that over 8 years). Just curious, does that 200,000 figure also take ino account the number of people retiring each month? Forgive me if this has already been discussed, I haven’t caught up on the enite thread yet [Previous page](https://boards.straightdope.com/t/hows-the-bush-economy-doing-now/314834.md?page=1) [Next page](https://boards.straightdope.com/t/hows-the-bush-economy-doing-now/314834.md?page=3)