Clinton
During Clinton's tenure, the U.S. enjoyed continuous economic
expansion, reductions in unemployment, and growing wealth through a
massive rise in the stock market. The economic boom ended shortly
after his term ended, possibly indicative of a stock market bubble;
Although the reasons for the expansion are continually debated,
Clinton proudly pointed to a number of economic accomplishments,
including:
1. More than 22 million new jobs
2. Homeownership rate increase from 64.0% to 67.5%
3. Lowest unemployment in 30 years
4. Higher incomes at all levels
5. Largest budget deficit in American history converted to the
largest surplus of 6. over $200 billion
7. Lowest government spending as a percentage of GDP since
1974
8. Higher stock ownership by families than ever before
The reasons for this growth are hotly debated, but many cite his
1993 tax increase which is generally acknowledged to have reduced
the deficit, which in turn lowered interest rates, which spured
comsumption and consumer spending. Alan Greenspan supported this
plan, which was approved by Congress without one Republican vote.
His critics credit solely Alan Greenspan, the Republican Congress'
1995 spending cuts, the Contract with America initiatives, or even
Ronald Reagan's 1981 tax cut during the 1980's.
---------------------
Bush
During his first term, Bush sought and obtained Congressional
approval for three major tax cuts, which increased the standard
income tax deduction for married couples, eliminated the estate
tax, and reduced marginal tax rates, and are scheduled to expire a
decade after passage. Bush has asked Congress to make the tax cuts
permanent. According to the Center on Budget and Policy Priorities,
by 2003 these tax cuts had reduced total federal revenue, as a
percentage of the Gross Domestic Product (GDP), to the lowest level
since 1959.
The effect of the tax cuts and simultaneous increases in spending
was to create record budget deficits. The annual deficit reached
record current-dollar levels of $374 billion in 2003 and $413
billion in 2004, though as a percentage of GDP these deficits are
lower than the post-World War II record set under the Reagan
administration in the 1980s.
In an open letter to Bush in 2004, more than 100 professors of
business and economics at U.S. business schools ascribed this
"fiscal reversal" to Bush's "policy of slashing taxes - primarily
for those at the upper reaches of the income distribution". Bush's
supporters have countered that, primarily because of the doubling
of the value of the child tax credit, "7.8 million low and
middle-income families had their entire income tax liabilities
erased by the cuts."
According to the "baseline" forecast of federal revenue and
spending by the Congressional Budget Office (in its January 2005
Baseline Budget Projections, the trend of growing deficits under
Bush's first term will become shrinking deficits in his second
term. In this projection the deficit will fall to $368 billion in
2005, $261 billion in 2007, and $207 billion in 2009, with a small
surplus by 2012. The CBO noted, however, that this projection
"omits a significant amount of spending that will occur this
year--and possibly for some time to come--for U.S. military
operations in Iraq and Afghanistan and for other activities related
to the global War on Terrorism." The projection also assumes that
the Bush tax cuts "will expire as scheduled on December 31, 2010."
If, as Bush has urged, the tax cuts were to be extended, then "the
budget outlook for 2015 would change from a surplus of $141 billion
to a deficit of $282 billion."
Inflation under Bush has remained low. The recession and a drop in
some prices led to concern about deflation from mid-2001 to
late-2003. More recently, high oil prices have caused concern about
increasing inflation. So far, the economy has withstood these
threats.
Unemployment percentage, 2000 - 2005Private employment has
decreased significantly under Bush according to the Bureau of Labor
Statistics. After private employment (seasonally adjusted) peaked
at 111,680,000 in December 2000, it dropped to 108,250,000 in
mid-2003. The percentage drop in jobs was the largest since
1981-1983.
The economy has added jobs for 25 consecutive months, but the
employment level remained below the pre-Bush level until June 2005
when it reached 111,823,000 (preliminary). Considering population
growth, that still represents a 4.6% decrease in employment since
Bush took office.
Unemployment levels under Bush started at 3.9% in December 2000,
peaked at 6.3% in June 2003, retreated to 5.0% in July 2005, and
appear to be generally declining. The economy has added 1.924
million jobs so far in 2005.
The rise in GDP since the recession was undergirded by substantial
gains in labor productivity, in part due to layoffs of
underutilized workers. Long-term problems include inadequate
investment in economic infrastructure, rapidly rising medical and
pension costs of an aging population, sizable trade and budget
deficits, and stagnation of family income in the lower economic
groups.
Poverty Rate, 1973 to PresentWhile the GDP recovered from the
recession early in Bush's term, poverty has since worsened under
Bush according to the Census Bureau. This might be due to the
concentration of wealth being in fewer hands. The percent of the
population below the poverty level increased in each of Bush's
first four years, while it decreased for each of the prior seven
years to a 26-year low. At 12.7% in 2004, it is still lower than at
any time during the Reagan and Bush I administrations.
