Growth is beautiful

Unemployment down from 6.3% in 2003 to 4.5% now.  Tax revenues up 11% on the same period in the previous fiscal year.  2007 set to be one of the best budget years for four decades.  The stock market up by a half since 2003.

In normal times an economic record like this would produce dizzyingly good satisfaction ratings for a president.  These are not normal times, of course, but a time of war and a war that is not going well.  When George W Bush's presidency is evaluated, however, US economic growth - ignited by tax relief - will greatly boost the positive side of the ledger.

The data in this post is taken from a recent article by James C. Capretta for National Review Online.

Comments

[TimB]

While I support the American economic model one should acknowledge that growth in the eurozone seems to be edging out America at the moment and America's population grows (especially if one considers the illegals) at a steady rate. Growth per capita figures, though still quite impressive, would by no means be a great Bush success story. Is there much of a Bush success story?

[Umbrella man]

Come off it TimB:- eurozone growth may be good for a season but over many years it has underperformed Anglo-Saxon economies. We can only believe in the eurozone once it has performed for an extended period and it won't unless Sarkozy and Merkel gets labour market practices and welfare entitlement problems under control.

[TomTom]

The Trade Defict did not make an appearance. Credit-driven growth is always faster - but just what are Americans spending all this credit on ?

Hardly likely to be import substitution for Chinese and Japanese goods, so what can the US export to pay for its credit-junkie status as global debtor

[John]

The Japanese are sensible people (I can't see why the Chinese would differ) and as history has shown sensible people would like nothing more than a place to live i the US.

[ToMTom]

If I understood what "John" had written I might be the wiser....but it remains obscure and baffling

[JF]

TimB, the difference is in productivity growth, which in the US has far outstripped the Eurozone. Our economy is more efficient and we adopt technology at a faster rate, so our advantages will ensure our growth outlasts the Eurozone for at least another decade.

[Frogg (USA)]

Investor's Business Daily is doing a six part series on the Bush years in perspective. They have broken it down by topics. The economic section is summarized this way:

Since 2002:

• Real gross domestic product has soared $1.64 trillion, or 16.5%, during a five-year stretch that has yet to see a downturn and that has witnessed average annual growth of 3%.

• Disposable personal income — what's left after taxes — has jumped $2.16 trillion, or 29%, to $9.68 trillion.

• Productivity, the fuel for future standards of living, has improved 14.3%.

• Overall employee compensation has expanded 4% a year.

• Net wealth, the amount people would have after paying off their debts, has swelled $15.2 trillion, or 38%, to $55.6 trillion. That gain in just five years is more than the total wealth amassed in the first 210 years of America's existence — an unprecedented surge.

• About 69% of Americans now own their homes, an all-time high.

• The jobless rate, now at 4.4%, remains below its 40-year average. Since August 2003, 7.8 million new jobs have been created.

• Tax receipts have surged 43%, or $757.6 billion, again thanks to economic growth.

If interested, Articles can be read at:

http://www.ibdeditorials.com/Special1.aspx

[Tim Montgomerie]

Thanks Frogg. Really helpful.

[John]

TomTom, thank you for showing interest in my recent comment. Indeed, I clicked the "post" button at a wrong moment.

However, I do hope that you still might be the wiser.
You: "... so what can the US export to pay for its credit-junkie status as global debtor"
Me: On the one hand you seem to express concern for the US role as a global debtor. On the other hand in a recent comment elsewhere on this site you wrote:
"Crap. The Americans would use any incident where Prince Harry was harmed as a green light to attack Iran."
I sense your concern is not sincere and maybe even a bit of anti-Americanism.

But here's the thing: why bother to express concern for the current account deficit if 1)it's not sincere? and 2)there's not even any real reason to be concerned?
In the 1980's when anti-Americanism and the US current account deficit were somewhat similar to what we're experiencing today, many people said exactly the same thing as you do now. But what actually happened?
The Japanese bought American real estate. Where's the danger in that? Why would the Chinese necessarily do any differently?
To some extent they even created a bubble which ultimately burst and the US kept its money.
On a more serious note, my intention is of course, to point out that you are taking a certin danger for granted. History has not shown that this is necessarily well founded.

You may then argue that the current account deficit will cause the dollar to be devalued. But in that case the US can quit worrying about Chinese exports because these will be too expensive.
You may also have other concerns more or less well founded, but this will do for now.