ECONOMY ROLLING DESPITE CAMPAIGN CRITICISMS
November 4, 2004
Driven by higher incentives to work, produce and invest, the U.S. economy has recovered nicely over the past two years, says economist Robert Barro of Harvard University.
Barro concedes that the Bush Administration's economic policies have been a mixed bag of sound tax and monetary policy offset by overspending and inconsistency on free trade. Nonetheless, he says many of the criticisms brought against the economy are nothing but politically motivated myths:
- Myth One: New jobs being created are low-quality; the reality is that from January 2001 to September 2004, real labor compensation per hour rose by 1.3 percent per year compared to compensation increases of 1.1 percent per year from 1991 to 2000.
- Myth Two: Income tax cuts of 2003 have been a failure; the reality is that since the tax cuts, real gross domestic product grew 4.7 percent per year, real business investment expanded 15.5 percent per year and labor productivity rose 3.8 percent.
- Myth Three: Jobs are few and far between; the reality is that the unemployment rate has fallen from 6.3 percent in June 2003 to 5.4 percent, today.
Barro adds that there is a misperception that Democrats are better at managing the economy. While President Clinton fared better than either Bush I or Bush II, he fared worse than Reagan. President Carter had the worst economic performance of all 14 presidential terms since 1949.
Source: Robert J. Barro, "Debunking the Myths of the Kerry Campaign," Business Week, November 8, 2004.
Browse more articles on Economic Issues