Posted on 10/31/2003 3:28:05 AM PST by kattracks
Capitol Hill (CNSNews.com) - While economists were scratching their heads over their missed predictions and business news services were describing the phenomenon with words and phrases like "sizzling" and "rocketed ahead," Congressional Democrats dismissed the largest single-quarter growth in U.S. gross domestic product (GDP) in 20 years as "meaningless."
The Dow Jones News Service said: "Third-quarter gross domestic product, a measure of all the goods and services produced in the U.S., rose at a sizzling 7.2 percent annual rate, more than double the 3.3 percent rate in the second quarter" of 2003. The Reuters news service led its story on the surprise findings with the headline, "Economy Rocketed Ahead in 3rd Quarter."
"The U.S. economy rocketed ahead at its fastest pace in more than 19 years in the third quarter of 2003 as consumers, their wallets fattened by tax cuts, went on a buying spree, an unexpectedly strong government report showed on Thursday," Reuters reported.
Wall Street had, according to a Dow Jones/CNBC survey, predicted growth in the GDP to be only 6.1 percent instead of the preliminary 7.2 percent announced by the Commerce Department Thursday.
Congressional Democrats, however, dismissed the report.
"I think every single American is far more interested in J-O-B than G-N-P," said Senate Minority Leader Tom Daschle (D-S.D.), incorrectly referring to the GDP by the initials used for the gross national product. GNP refers to the GDP plus income earned from foreign investments by those living in the U.S, minus income earned from U.S. investments by those living abroad.
"When you look at the fact that, in the last quarter, we've still lost 40,000 jobs," Daschle continued, "I don't think they understand any growth in percentages."
According to the U.S. Bureau of Labor Statistics (BLS), the unemployment rate has remained steady at 6.1 percent for the third quarter of 2003, down from approximately 6.25 percent in the second quarter.
"The number of unemployed persons, 9.0 million, was about unchanged in September, and the unemployment rate was 6.1 percent, the same as in August," the BLS said in its Sept. 2003 report, issued Oct. 3. "The number of jobs in manufacturing declined at a slower pace than in recent months, while employment in temporary help services continued to trend upward."
The Labor Department also reported Thursday that Americans filing initial jobless claims fell by 5,000 in the week ending Oct. 24, to 386,000. That's the fourth straight week that claims were below the 400,000 mark, which, according to Reuters, "economists consider a divide between an improving or deteriorating U.S. job market."
Nevertheless, Sen. Tom Harkin (D-Iowa) compared the improvements to a "third-world country where you have an oligarchy.
"[It's] more and more wealth being concentrated in a few hands," Harkin complained. "Sure, you can have a GDP growth but that's not the point of it. GDP growth without broad participation in that growth by working families is meaningless."
Rep. George Miller (D-Calif.) joined Daschle and Harkin in their criticism but also echoed Republican contentions that economic growth will yield job growth.
"The fact of the matter is, we still see the jobs lag," Miller said, "and we all understand that jobs lag behind economic recovery."
Miller still believes that the job growth is lagging too far behind the economic recovery.
"Yes, manufacturing is up, but manufacturing jobs aren't up," Miller said.
Rep. Joe Wilson (R-S.C.) issued a press release praising the GDP numbers and the Labor Department's report of 57,000 new jobs being created in September.
"Today is the Democratic Party's worst nightmare, proof positive that Republican policies of lower taxes result in economic growth and job creation," Wilson said. "We have not seen the economy grow this fast since President Ronald Reagan cut taxes in the early 1980s."
Wilson credited President Bush with "fighting to give tax relief and security to America's families." His statement and dozens of others in news reports were not the only references to the economic and job growth that resulted from the Reagan tax cuts.
House Speaker Dennis Hastert (R-Ill.) issued a document entitled "Putting It in Perspective," which noted that, "The last time the economy was this hot, so were these:
- At the movies: Terminator, Ghostbusters and Gremlins;
- In the post office: Stamps were 20 cents;
- On the radio: Bruce Springsteen's Born in the USA;
- At hair salons: Bangs with Bold Hold hairspray and mullets (debuted);
- On television: The A-Team, T.J. Hooker and Highway to Heaven (debuted);
- At the gas pump: Regular unleaded cost $1.15 per gallon;
- In clothing stores: Shaker knit sweaters and moonboots; and
- At the polls: Republican President Ronald Reagan's electoral landslide victory of 49 of 50 states over Democrat Walter Mondale."
Wilson also noted what he called several "other promising signs for the economy," including:
- "The value of U.S. stock markets has increased $2 trillion since the beginning of this year;
- Disposable personal income is up 5.8 percent at an annual rate in 2003;
- The U.S. homeownership rate was 68.4 percent in the third quarter, its highest level ever;
- Productivity growth remains strong, which has bolstered business profits;
- Orders of manufacturing goods have been increasing since earlier this year;
- Shipments of durable goods have increased since this summer after a period of decline and stagnation. Orders have been above shipments since early 2003, suggesting future strengthening; and
- Consumer confidence has also increased. Measures of consumer sentiment are well above the levels seen just before the Iraq war."
Wilson also chastised Democrats for refusing to admit the purported success of the Republican economic strategy.
"As Democrats continue to push their failed tax-and-spend rhetoric," Wilson said, "Republicans will continue to champion the successful policies of lower taxation, fiscal responsibility and a strong national defense."
See Related Story:
Dems Offer Bush No Credit for Largest Economic Growth Since 1984 (Oct. 31, 2003)
E-mail a news tip to Jeff Johnson.
Send a Letter to the Editor about this article.
Doesn't mean anything to them. Of course, when you don't have a clue as to how things really work in this world, everything tends to be a blur. These pundits really ought to have prescriptions lenses placed in their navels, so they may see clearly where they are going. Their collective heads are jammed so far up, their only view of the world is through their navels, and apparently even that is badly distorted.
How many of us here can claim this? I can't.
Will 'trickle down' work this time?
Elitist, condescending Democrat quote of the day.
I don't like the term disposable, but I have had two promotions this year, and I expect one more slight raise and a bonus early next year. My salary has gone up 15% this year, not counting Bush tax cuts. My industry is very much tied to the overall business climate. My company's stock is up, we are offering a dividend next year as a result of the new tax laws, and that is making our stock more attractive still. Opportunity abounds! But then, I have made it through the last few years very well. In fact, since 1999, when the economy started to slow, my income has increased something like 30%, and my wife has done well also. We've started a home based business, invested in another long term business project. My cup runneth over.
Will 'trickle down' work this time?
It only works for people with brains and ambition. Neither trickle up nor trickle down work for the stupid and lazy. In fact trickle up never works.
The Democrats want to take money from those that employ Americans, and give it to the "poor." The poor would promptly take that dough to WalMart and spend it on stuff made in China. The trickle up plan would put people to work.. What the Democrats don't tell you is the people that would get the new jobs just happen to live in China... not the USA.
Trickle up failed for 8 straight years in the 1930's. Even when all goods were made in the USA it did not help. The people who are taxes would have spent or saved the money that was taxed. If they saved it the banks whould have loaned it and the borrower would have spent the money. If they person taxed spent his money it put people to work just like his saved money did.
The government just takes the money and it gets, then spends it putting people to work. The people who would have stayed employed if the money were not taxed just get laid off.
In the 1930's the government put 8 million people to work as government employes in the WPA. It did not change the unemployment rate by even a single percent. When FDR took money from the "rich" the rich just fired people to pay the tax. Then FDR put other unemployed people to work with the money. It is a zero sum game. The people fired never figured out they lost their job so others could work. Those hired by FDR were sure to vote for him. It is great politics but it hurts as many as it helps. In the long run it hurts becuase the "Rich" see nothing to be gained by making money if the governemnt is just going to take it. So they tend to trade leasure for money and more people get laid off.
Real income did not rise in the 30's for anyone, and unemployment remained at 25 percent for 8 years despite the government hiring 8 million people.
Trickle down was tried in the 1960's by the Democrats under JFK and it worked. Unemployment went from high single digits to low single digits. Reagan noted that JFK's plan worked and tried it for the Republicans in the early 1980's and it worked again. Unemployment went from double digit to low single digit. Dubya is trying it now an it appears to be working exactly like it did in 1963 and 1983. It is doing the same thing in 2003 that it always does.
When the economy turns back up, companies always work existing workers overtime rather than hire new. With the tax and benefit situation the way it is, it is cheaper to pay time and a half and double time to an existing worker than it is to hire a new worker.
At many firms the cost of taxes and benefits exceeds the wage rate paid. The cheapest labor hour for many companies are double time Sunday hours.
Trickle down has always worked. Trickle up has never worked.
Free markets reward entrepreneurs. Free markets distribute wealth to those that earn it first. Those satisfied to be not so valuable hired help, always get the benefits last and lose them first.
The only alternative is socialism where there are no benefits .... only mutually shared poverty... except for the ruling class.... they always enjoy the trappings of wealth.
The funny thing is the ruling class turns out to be the same people under either system. The rule is, smart ambitious people will always rise to the top. Dumb lazy people are always crying "When will I get mine... I don't get anything... sob sob"
I certainly can claim this fact. This is the first time in my life that I am credit card debt free, full funding my 401K and have liquid assets.
I say this not to impress anyone because I know it is not easy, but to demonstrate that most of these circumstances came as a result of extra savings from the Bush tax cuts. Those refund checks were a great way to make a dent on my debt and the little extra in my check from reduced tax witholding helps me put aside something every month.
So if a statistic doesn't fit your personal situation it must not be true?
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.