President Bush's critics accuse him of presiding over a weak
economy. They claim that job creation has been anemic and that
growth has been uneven. Sure, partisan politics color these
charges, but that doesn't necessarily mean they're untrue. What do
the numbers actually say?
As is often the case in politics, we find competing answers.
Critics use one set of job numbers to make the president's
performance look weak; supporters use another measure of employment
to make him look good. The same can be said for economic growth
figures: Critics measure growth from the day President Bush took
office and claim the economy's performance has been sub-par.
Supporters say we shouldn't blame the president for the recession
he inherited and point to the strong growth that has occurred since
the tax cuts took effect.
So who's right? Has President Bush done a poor job? Fortunately,
there's a way to answer this question without having to pick sides
in the partisan fight. The Joint Economic Committee (JEC) of
Congress has just published a comprehensive report analyzing
economic performance among the world's major economies (available
at
www.house.gov/jec). Entitled "International Economic
Performance Since the Stock Market Bubble," the report compares
growth rates and job creation in the United States, Japan, the
European Union and Canada.
The report finds that the United States economy has significantly
out-performed other developed economies. This does not necessarily
mean that President Bush has done a great job, but it unambiguously
means that his economic policies have performed better than those
of our major foreign competitors. In a global economy, it's an
unbiased -- and important -- way of measuring who has done the best
job.
The JEC report notes that all developed nations suffered an
economic downturn earlier this decade. Financial markets declined
and unemployment rose in every major country. The key question is
how various leaders responded. President Bush aggressively moved to
lower tax rates. He saw how lower tax rates during the 1980s helped
trigger a record economic boom and wanted to repeat Ronald Reagan's
successful formula. According to the JEC study, President Bush made
the right decision:
- The U.S. economy has expanded by 7.8 percent since the
recession, the best performance in the developed world. Indeed,
it's grown more than three times faster than European
economies.
- The U.S. unemployment rate has fallen by 0.8 percentage points -- again, the best performance in the developed world. The U.S. unemployment rate of 5.6 percent is far lower than the 8 percent unemployment rate in Europe.
While the White House can take comfort in the relative strength of the American economy, this doesn't mean that the administration should be satisfied. Economic growth could be much higher, especially if there are improvements in economic policy. Putting a lid on federal spending would be a big step in the right direction. The Bush administration has not done a good job in this area, allowing spending to climb much faster than it did when the Democrats last controlled the White House.
But since people in glass houses usually don't throw stones, it's unlikely that John Kerry will accuse President Bush of being a big spender. Sen. Kerry has compiled a voting record to the left of Ted Kennedy. During the campaign, he has endorsed programs that would add hundreds of billions of dollars in new spending.
America has the world's most powerful economy, but our advantage won't last if Republicans and Democrats waste money on ineffective government programs. We don't want France's stagnant economy and high unemployment, so our lawmakers shouldn't behave like French politicians. That means they should compete to make government smaller, not bigger. They can be sure the numbers will vindicate them if they do.
Daniel J. Mitchell is the McKenna fellow in political economy at The Heritage Foundation.
Distributed nationally on the Knight-Ridder Tribune wire