Depressed? It's Not the Economy

Many on the left insist President Bush ruined America's economy. What's their evidence? Rumor and nonsense, says National Review, in part based on this nifty chart:


Economic Growth under W (click to enlarge)

As expected, growth increased after the tax cuts. Indeed, the tax break -- equitable throughout income brackets -- likely ameliorated and truncated the recession. And the cuts were not the principal cause of increased deficit:

As House Democratic leader Richard Gephardt cogently observed in February 2003, “We are in recession, we are at war, and that has consequences for any budget.” According to the Office of Management and Budget, about 75 percent of the increase in discretionary spending over the past three fiscal years was due to our nation’s response to 9/11 and the war. The Congressional Joint Economic Committee found that 73 percent of the downturn in the budget surplus over the last three years was the byproduct of increased government spending and the weak economy. Only 27 percent of the dissipation was caused by the Bush tax cuts.

Even the New York Times conceded deficits were driven by the recession, which predated the cuts:

From 2000 to 2002, individual income taxes fell 18.8 percent, more than three times the decline in adjusted gross incomes, the I.R.S.'s latest statistical reports show. To some extent, taxes fell more than incomes because of tax cuts championed by President Bush and approved by Congress in 2001. But in that year and in 2002 the cuts applied primarily to those making less than $100,000, especially families with children, and to capital gains from the sales of appreciated assets like stock.

The major tax rate reductions for highly paid Americans did not take effect until 2003. . .

The unprecedented back-to-back declines in reported incomes was caused primarily by the combination of the big fall in the stock market and the erosion of jobs and wages in well-paying industries in the early years of the decade.

So, Democrats, if you're still depressed, consider a shrink.

More:

Writing in NRO, Greg Kaza has more good news:

• Stock Market Indices: All three major U.S. stock market indices increased for the second consecutive year, the first back-to-back annual gains since 1998-99. The Dow Jones Industrial Average rose 3.1 percent (10,453.92 to 10,783.01), the Nasdaq jumped 8.6 percent (2,003.37 to 2,175.44), and the S&P 500 climbed 8.9 percent (1111.92 to 1211.92).



• The Bond Market: The yield on the bellwether 10-year Treasury note actually fell from 4.27 to 4.23 percent despite a 125-basis point increase in the intended fed funds rate from 1 percent to 2.25 percent.



• Gross Domestic Product: GDP, adjusted for inflation, increased 4.5 percent in the first quarter, 3.3 percent in the second, and 4 percent in the third. Real GDP is likely to exceed 3.5 percent on an annual basis when fourth-quarter data is released. As NRO Economics Editor Larry Kudlow notes, 3.5 percent is the nation’s “long-run growth trend.”



• Employment: Few foresaw the U.S. economy adding 2.2 million new jobs, but 2004’s final nonfarm payroll employment report, released January 7, confirmed this positive trend. Last year was the first since 2000 to record net new jobs growth.
  
  The new jobs report also shows that goods-producing employment recorded its first annual increase since 1999, with its largest component — manufacturing — showing its first gain since 1997 after six consecutive annual declines. Manufacturing finished in positive territory as a result of gains in the durable goods sector, including fabricated metals, computer and electronic products, and transportation equipment.