BUSH'S VERY GOOD YEAR
December 27, 2007
Against all odds -- especially the sub-prime credit crunch -- and despite the usual drumbeat of criticism, President George W. Bush has presided over a very good economic year, says Lawrence Kudlow, host of CNBC's Kudlow and Company.
- Calendar year 2007 looks set to produce 3 percent growth in real GDP, nearly 3 percent growth in consumer spending and over 3 percent growth in after-tax inflation-adjusted incomes.
- Meanwhile, headline inflation (including food and energy) will have run at 2.5 percent, with only 2 percent core inflation.
- Jobs are rising over 100,000 per month, and the stock market is set to turn in a respectable year despite enormous headwinds.
- Low tax rates, modest inflation and declining interest rates continue to boost the Goldilocks economy.
- Further, the president has stopped a lot of bad legislation on higher taxing and spending, including winning on S-CHIP and the alternative minimum tax.
And he's not yet finished, says Kudlow. Bush recently said he will not stand for the continuing rise of pork-barrel earmarks. This is huge, given their proliferation. For instance:
- The recently sent up spending bill contains such essential items as rodent control in Alaska ($113,000) and olive fruit-fly research in France ($213,000).
- It also funds a hunting and fishing museum in Pennsylvania ($200,000) and a bike trail in Minnesota ($700,000).
- Further, it includes a post office museum in Las Vegas ($200,000) and a $2 million monument to Rep. Charlie Rangel in New York.
Looking ahead, the economy also would benefit from a corporate tax cut for both large and small businesses, including corporate capital gains, says Kudlow. The U.S. dollar would reap the rewards, as new investment would flow in from the world. Several recent studies also show that businesses would pass on tax-cost savings to the workforce, thereby bolstering wages and ultimately creating new jobs.
Source: Lawrence Kudlow, "Bush's Very Good Year," Townhall.com, December 27, 2007.
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