Monday, November 13, 2006 - The Bush Failed Economy, The Only Things Rising Are Stocks And Poverty

While the United States can make rapid progress against hunger by improving and expanding the national nutritional programs, a durable end to hunger depends on a broader effort to reduce poverty in America. The best solution to hunger is a decent job. Some people are elderly, disabled or, for other reasons, cannot work. They need safety-net programs. But when poor people are asked what they most need, they ask for a stable, well-paying job or an educational opportunity that will lead to a good job. Many people make tremendous efforts to gain employment, such as migrant farm workers who travel hundreds of miles in hopes of finding work. But people cannot always find jobs, and many jobs pay too little to support a family.

Helping people overcome poverty in America by finding jobs that pay a livable wage must be a part of any U.S. plan to end hunger.

Create Jobs

One of the most important steps to cutting hunger and financial difficulty is for government leaders to reduce high unemployment. How best to achieve a strong economy and low unemployment is debated. Some believe in supply-side economics, including tax cuts for investors and corporations in order to stimulate job growth. Others argue that reducing taxes or providing assistance to families who live paycheck to paycheck (and who are likely to spend extra income immediately) is a more effective way to stimulate the economy. In fact, if low-income people receive more food stamps, research shows that they use them right away - both reducing hunger and boosting grocery sales. Every $1 in food stamps turns over five times within the economy.

Prepare People for Work

People also need to be prepared for the jobs that the business community needs. Improving U.S. public primary and secondary education systems is a tried and true way to help citizens fill jobs within the United States and remain competitive in a global marketplace. Access to higher education helps some citizens move up the economic ladder. For every demographic - Blacks, whites, Latinos, men and women - incomes rise as education rises.

Make Work Pay

The United States always will need people to take low-skilled jobs such as farm work or cleaning hotel rooms, which most often pay lower wages. But the only way for many of these workers to get by - and to be food secure - they must receive more compensation than the market is willing to pay for their skills and services. The Earned Income Tax Credit (EITC) systematically raises after-tax wages of low-income workers. It has become one of the most effective programs in lifting families out of this situation.

Programs such as affordable housing, and child care and transportation assistance also help low-income workers make ends meet. These are things at the present time the King George Administration has fefused to do on the contrary he has deeply cut these programs.

The economy entered recession in March of 2001, two months after President Bush was inaugurated. During the spring of 2001, the Administration claimed that its economic plan was the answer to our economic troubles and the President's tax cut proposals would strengthen a struggling economy. President Bush's economic plan was enacted soon after the recession began and now has been in place for well over three years. The Administration and congressional Republicans predicted that the President's tax cut plan would turn the economy around. Those predictions proved false - instead of a quick economic turnaround, the country still has fewer jobs than it did when the recession began three and a half years ago. This is the longest period of job losses since the Great Depression. In every other recession since, the economy had recovered its lost jobs long before this point. This is true even of the last economic recovery, which began so slowly that it was described as a "jobless recovery." However, by this point in that recovery, the economy had created 3.9 million jobs. Today, we have seen only 696,000 new jobs over the comparable period.

Weak jobs recovery.While the economy has created jobs over the last year, the recovery has been modest during this period, with a total of 1.7 million jobs created, or 143,000 per month. This is not even enough to keep up with population growth, and fewer jobs than were created during any year of the Clinton Administration.

  • A healthy labor market would be creating jobs at a more rapid pace; during the last economic expansion, the economy created 200,000 jobs per month for a full decade, and 236,000 jobs per month during President Clinton's two terms.
  • During the last two economic recoveries, we saw extended periods of strong job growth. For example, on average, more than 300,000 jobs per month were created in both 1984 and 1994.
  • If the economy continues to create jobs at the current rate, we will not return to the level of employment when President Bush took office until early next year. That will leave us with the longest jobless recovery in our history and four lost years of normal job growth, reducing opportunities for new college graduates and those seeking new jobs. We also have experienced a permanent deterioration in our fiscal position that will mean higher interest rates and limit future growth and job creation, as well as burden future taxpayers with a heavier national debt and tax burden. The President's economic plan has clearly failed.

    The Bush Economic Record

    The recession began on President Bush's watch and a Republican Congress almost immediately enacted his plan to fix it. While the plan has been an economic and budget failure, the Administration's only response has been to push for more of the same failed policies. The economy's performance under President Bush reflects the failure of his economic plan.

  • The economy has lost more than 1.6 million private sector jobs under President Bush. His is the only Administration to lose jobs since Herbert Hoover.
  • Census Bureau data shows that poverty increased and real median household income have fallen in each of the first three years of the Bush Administration.
  • The budget deficit reached a record high of $374 billion last year, only to see a new record this year of an estimated $415 billion.
  • Average annual economic growth under President Bush has been 2.5 percent, barely two-thirds the average growth rate under President Clinton.
  • Poverty increasing. The poverty rate increased from 12.1 percent in 2002 to 12.5 percent last year. After falling for seven consecutive years and, in 2000, reaching its lowest level since 1974, the poverty rate has climbed for the last three years, with 4.3 million more Americans living in poverty last year than in 2000.

    Real income falling. Real median household income has fallen for three consecutive years. Median household income fell to $43,318 last year - a drop of more than $1,500 from $44,853 in 2000 (in 2003 dollars; i.e., adjusted for inflation). Median income provides a measure of the typical household, where half of all households earn more and half earn less. The first President Bush and President Ford are the only other recent Presidents to see real income decline during their term, but neither saw income losses as great as we have experienced under the current President Bush.

    A record deficit. The budget surpluses that President Bush inherited have disappeared. Our budget outlook has deteriorated each year he has been in office as record surpluses turned to record deficits of $374 billion in 2003 and an estimated $415 billion in 2004. Massive deficits are now projected for the foreseeable future.

    A record debt increase. Last year, Congress passed the largest increase in the debt ceiling in our history, a $984 billion raise in the limit. The previous high was a $915 billion increase in November, 1990, under the first President Bush. Another increase is necessary to prevent the United States from going into default for the first time in our history.

    Worst fiscal reversal in history. Unfortunately, this is not a temporary deficit resulting from an economic slowdown or the costs of the war on terrorism. Instead, the Administration is proposing deficits as far as the eye can see, with the Congressional Budget Office projecting deficits over the next decade of $2.3 trillion under current law and about $3 trillion under the President's budget proposals.

    Stock markets fall. The Dow, NASDAQ, and S&P 500 stock indices have all declined since President Bush took office. The declining market reflects investors' confidence in the economy. But it has also wiped out hundreds of billions of dollars in assets, including significant retirement funds, made it more difficult and expensive for businesses to raise capital, and reduced consumer spending.

    Republicans dig a deeper hole. The economy has remained sluggish despite enactment of tax cuts that the Administration claimed would revive the economy. Instead of reevaluating their failed policy, the Administration and congressional Republicans have simply offered more of the same. Yet the economy continues to produce millions of jobs less than the Administration predicted would result from its tax cuts. Meanwhile, the massive deficits that the President and Republican Congress have created will significantly reduce future economic growth and place a higher tax burden on future generations.

    I hope to do mo blogs on poverty and financial burdens on students these are issues that must be discussed and I hope to so in future blogs strongly encorage you to comment and weigh in with you opinions and point of view

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