From the LA Times:
Bush upbeat about the economy
By James Gerstenzang, Los Angeles Times Staff Writer
12:37 PM PDT, September 20, 2007
WASHINGTON — Sidestepping the turmoil in the housing market and the credit problems associated with it, President Bush said today that the nation’s economy was strong and would remain so if Congress steered clear of tax increases.
But he would not rate the risk of recession, saying, “You need to talk to economists. I think I got a B in Econ 101. I got an A, however, in keeping taxes low.”
From the New York Daily News:
Bush conceded these are “some unsettling times” for the economy, but stated that the fundamentals – low inflation, steady markets, low unemployment, and corporate profits – were strong.
Note: nobody can verify the “B” grade in Economics, while there is considerable discussion that he received a 72 and 71 in economics at Yale.
Technorati Tags: President Bush,
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Apparently he lowers taxes, but has no clue what the effect is on the economy.
Further, given the level of success this President has had, I would expect a positive statement about the economy to signal the beginning of a recession.
Unless I’ve missed something, Bush will be an ex-President in a bit more than a year. Let’s hope for something better and not just for something different.
Why waste more time on Bush bashing with Hillary so likely to replace him?
After all the brave new Democrat House and Senate have already earned a solid D. Any bets on Hil’s grades?
A 71 or 72 when Bush was in school is probably worth an A or a B today with grade inflation. We also know that Bush got higher grades than John Kerry. And at least Bush thinks he has some limitations. But what about Hillary? Does anyone question her ability to centrally plan 1/7th of the economy with her health care proposals?
Are you disputing that raising taxes would be bad for the economy?
The Bush economy has been running on tax cuts and low interest rates for many years. If the economy is really weaker, do we really want those tax cuts to expire?
C Thomson…..can you please elaborate whe you say “After all the brave new Democrat House and Senate have already earned a solid D”
i disagree with you, given that they do not have a clear cut majority……and they have to make sure that american fools who think that “pulling out of iraq=not supporting troops” do not distance themselves and we get another term of knucklehead repubs in the administration…
you also have to keep in mind that the repubs have the support of big business…….and then religious right who will keep supporting them no matter what.
frankly i think we the people are so retarded….we deserve (we make) our kings/lawmakers as per our liking.
There is no real evidence that tax cuts or tax increases have a meaningful effect on the economy, when we are at such already such low–some would argue too low–rates.
Not a very popular view, especially for those supply siders. But the fact is there is no causal evidence that the EGTRRA cuts were responsible for the revenue growth, only anecdotal.
there is even very little economic evidence, in the data, that the cuts stimulated the economy except some who say it may have added .04% to GDP growth.
Conversely, there is no economic evidence that tax increases, like those in the 90s, impede economic growth. There just isn’t.
theory can be stated as fact, but we all know how silly that is.
He says the supply-side tax cuts are working.
But in the last four years — after the supply-side tax cuts — real GDP growth has average 3%.
This implies the tax cuts are responsible for the economy achieving its long trend or average growth.
Even Jimmy Carter had stronger growth in the four years of his term and that includes a recession.
Let the Supply Siders speak for themselves:
Kudlow, NRO July 10, 2006 7:44 AM
Did you know that just over the past 11 quarters, dating back to the June 2003 Bush tax cuts, America has increased the size of its entire economy by 20 percent? In less than three years, the U.S. economic pie has expanded by $2.2 trillion, an output add-on that is roughly the same size as the total Chinese economy, and much larger than the total economic size of nations like India, Mexico, Ireland, and Belgium.
This is an extraordinary fact, although you may be reading it here first. Most in the mainstream media would rather tout the faults of American capitalism than sing its praises. And of course, the media will almost always discuss supply-side tax cuts in negative terms, such as big budget deficits and static revenue losses. But heres another suppressed fact: Since the 2003 tax cuts, tax-revenue collections from the expanding economy have been surging at double-digit rates while the deficit is constantly being revised downward.
For those who bother to look, the economic power of lower-tax-rate incentives is once again working its magic. While most reporters obsess about a mild slowdown in housing, the big-bang story is a high-sizzle pick-up in private business investment, which is directly traceable to Bushs tax reform. It was private investment that was hardest hit in the early-decade stock market plunge and the aftermath of the 9/11 terrorist bombings. So team Bushs wise men correctly targeted investment in order to slash the after-tax cost of capital and rejuvenate investment incentives.
The move paid off. Investors now keep nearly 50 percent more of their after-tax capital returns an enormous increase that has resulted in a remarkably profitable and highly productive business sector. While the overall economy has grown by one-fifth since mid-2003, private business investment has expanded by 37 percent.
Note: nobody can verify the “B” grade in Economics, while there is considerable discussion that he received a 72 and 71 in economics at Yale.
No, they can[t verify the “B”, becasue according to Bush’s Yale transcript it was a C-
http://2004.georgewbush.org/bios/yale-transcript.asp
Buzzcut — you do realize that Kudlow is using the exact same data I did.
See what spin can do, describing average or mediocre results as great while avoiding giving you any realistic comparisons.
The 37% growth in nominal capital spending Kudlow quotes turns into only 23% in real terms. But at this point in the 1960’s cycle real investment was up 76%, in the 1980’s it was up 32% and in the 1990’s the rise was 48%, or more than double what Bush has achieved.
But at this point in the 1960’s cycle real investment was up 76%, in the 1980’s it was up 32% and in the 1990’s the rise was 48%, or more than double what Bush has achieved.
Well, the tax cuts in the ’60s and ’80s were greater!
I never said the economy was “good”, just that, whatever growth we have, its generated by low taxes and low interest rates. Being that growth, good or bad, is generated by things mostly beyond a President’s control, Bush did what he could.
And now that recession looks likely, not is not the time to jack rates back up.
So, why are we listening to someone (w) who concedes he is no economist, that his entire record (grades, admission tests, military service, business success, drug addiction) is a bit shady?
Are we as desperate as Techy2468 thinks we are?
frankly i think we the people are so retarded….we deserve (we make) our kings/lawmakers as per our liking. Sounds so democratic until you realize that might B the problem: more than half decline to express their liking.
Frankly, it’s time for me to distinguish myself from “we the (retarded) people” and you?
If you look at the historic record the single most important, if not dominant factor, driving business investment it is business profits. But if you compare profits growth and investment growth this cycle you have to conclude that capital spending this cycle is much weaker than historic relationship suggest it should be. For most of this cycle essentially every major macro model forecast of capital spending has proven to be too optimistic.
Tax cuts by themselves are good for economic growth, but one must also looking at spending too. This has been the achillee heal of the economic performance of the 2000s. Unfortunately, economic spending a percentage of GDP has gone up under Bush, while it was relatively low under Clinton. If Bush would have been able to impose some fiscal discipline on the Congress and controlled spending as a percent of GDP, the economy would have fared much better. Bush’s tax cuts were more like tax shifts. Besides his “tax cuts”, Bush and the Republican Congress have acted like big spending Liberals. But then NeoCons are really Liberals with an aggressive foreign policy.
The tax cuts are all borrowed money guys. Paulson reported last week that we are going to hit yet another spending limit in October. Bush is spending money like a drunken sailor in a whore house. And guess what …our kids are going to get a IOU to pay off …in addition to their parents SS and Medicaid. Eventually someone has to pay the bills!
Remember that it is the Congress that holds the power of the purse. Bush can veto the Congress, but the constitutional power to spend lies with the Congress. So, it is the Democratic controlled Congress who are spending like drunken sailors. Perhaps, that is why their public approval rating is 11%.
Isn’y important to ask who had their taxes cut? not the middle class with the AMT,and certainly not the poor.only the top 5% have seen any benefit and the top 1% has seen the greatest benefit by far.as far as hillary…won’t it be interesting when SHE has GW’s tyrannical powers?
Professor Chin: while there may be “considerable discussion” about the Presidents grade in economics 35 years ago as an undergraduate at Yale, I respectfully suggest you find something more substantive to blog about.
Professor Chin: I assume you got straight A’s in economics: how would you respond to recent Israeli bombings of purported North Korean nuclear facilities in Syria?
Qinqdao: This post was essentially comment free. All I did was recount the President’s view on the state of the economy. Surely, his views on the subject, and implicitly what policy actions should or should not be undertaken, is worthy of note.
Isn’y important to ask who had their taxes cut? not the middle class with the AMT,and certainly not the poor.only the top 5% have seen any benefit and the top 1% has seen the greatest benefit by far.
The middle class pay AMT? I suppose that the potential is there, but we seem to be getting yearly reprieves by Congress, exempting the vast majority of the middle class from AMT. Hopefully that will continue.
Or perhaps you mistakenly think that households with incomes well in excess of $100k are middle class?
I’m not sure where I fit on the income scale, but my household income is well under $100k. I certainly benefited from the Bush tax cuts. I got a $1000 child tax credit, and I got the 10% bracket to start instead of the 15% bracket. The middle class certainly got some nice breaks from the Bush tax cuts.