Pelosi Expansion Continues Apace

GROSS DOMESTIC PRODUCT: FOURTH QUARTER 2006 (ADVANCE)

Real gross domestic product -- the output of goods and services produced by labor and property located in the United States -- increased at an annual rate of 3.5 percent in the fourth quarter of 2006, according to advance estimates released by the Bureau of Economic Analysis. In the third quarter, real GDP increased 2.0 percent.

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Bush's Real Record

Bush's Real Record
INVESTOR'S BUSINESS DAILY

Posted 1/31/2007

Economy: The mantra among critics of President Bush is that he's been "incompetent" as chief executive. To which we respond: Looked at the U.S. economy lately?

In his "State of the Economy" speech Wednesday, Bush expressed justifiable pride in his economic accomplishments. Our good friend Larry Kudlow keeps calling it "the greatest story never told." And indeed it is.

The Bush-is-a-failure mantra is, quite simply, out of touch with reality. What the economy's done in the past six years, especially in view of what Bush faced on entering office, has been nothing short of remarkable.

Remember that first bleak week, way back in January 2001? The economy was in a free fall, with job growth having peaked in mid-summer 2000. During Bush's first quarter in office, the economy actually shrank.

This wasn't surprising, given the Fed had been ratcheting up interest rates for two years and the stock market had just suffered its biggest meltdown. Americans took a $7 trillion hit from that debacle, and some feared we might even slide into a depression.

Then came the first attack on U.S. soil since Pearl Harbor, killing 3,000 people, costing $100 billion in direct costs to the economy and untold billions more in indirect costs, and damaging the national psyche. People stopped flying and buying. They cocooned.

It was the worst first year for a president since FDR. But Bush turned a potential disaster into one of the success stories of the post-World War II era. Yet few credit him for it.

His three tax cuts pushed 5 million mostly low-income families off the tax rolls and substantially shifted the tax burden toward the rich. Despite harsh criticism, the cuts revived the economy.

Where are we today? "Across our nation," Bush said Wednesday, "small businesses and entrepreneurs are creating millions of new jobs. Retail sales are up, consumer spending is strong, exports of goods and services have jumped by nearly 35%. The Dow (industrial average) has set records 26 times in the past four months. Productivity is strong, and that's translating into higher wages."

Every word true. And yet, our newspapers and TV talking heads are obsessed with stories of mass "inequality" and "middle-class squeeze" and "jobs shipped abroad" and "falling behind."

Reality is quite different, of course. But reality can never be permitted to get in the way of Bush-bashing — the stock in trade of the mainstream media and their allies in the Democratic Party.

So what's the real record? Since Bush's tax cuts took effect in mid-2003:

• Real gross domestic product is up to $1.33 trillion, or 12.6%.

• Existing businesses have hired 5.9 million workers (not counting the millions of jobs entrepreneurs have created).

• Corporate profits have soared 91% to $1.6 trillion.

• Tax receipts have leapt $503 billion, or roughly 1.1 percentage points of GDP, refuting the notion the tax cuts "caused" deficits.

And thanks to rebounding stock prices and huge gains in home values, Americans' total wealth has soared 39% to $54 trillion — the biggest expansion ever.

After such a stellar performance, a breather — what economists call a "midcycle correction" — would be in order. Yet the economy continues to power ahead.

In 2006's final period, GDP growth was 3.5%, and it has averaged 3% since the tax cuts. Real wages rose 1.7% in '06, much faster than the 0.3% average of the Clinton years. In just the last 12 months, unemployment plunged from 5.0% to 4.5%, near postwar lows.

More of us have jobs, own homes and businesses, and work for higher pay than at any time in history. We're the richest people on earth. For a change, let this story be told.

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GDP is up, jobs are up, productivity is up, wages are up, and inflation is in check.

If only Pelosi and Reid would save us from this prosperity!