Each Tuesday until the election, I will try to review one of the five chapters in the Bush-Cheney Agenda for America. Today’s review is directed at Chapter 1’s Creating Opportunity for America’s Workers, which has as its highlights:
• Reforming America’s High Schools: President Bush will provide $250 million annually to extend state assessment of student reading and math skills.
• Jobs for the 21st Century Initiative: President Bush will provide $500 million for Jobs for the 21st Century, which will help educate and train high-skilled American workers in schools and community colleges.
• Tax Reform: President Bush will work to make the tax code simpler for taxpayers, encourage saving and investment, and improve the economy’s ability to create jobs and raise wages.
• Opportunity Zones: President Bush will create new Opportunity Zones, which will encourage public and private investment and provide priority consideration for Federal benefits to communities that are under economic hardship.
Notice the first and second bullet points suggest more government spending. However, an additional $250 million in education spending is less than 0.5% of what we spend on elementary and high school education. If this funding for Jobs for the 21st Century is distributed over 5 million workers, which is about the shortfall in job creation for the Bush years, then it amounts to a mere $100 per person. And of course, the last two sound like the usual free-lunch supply-side or voodoo economics.
The webcite asks one to read the chapter, but there things only get worse from the very opening: “Three years. Three tax cuts. An economic recovery—American ingenuity—unleashed.” Over the past four years, real GDP has grown less than 2.3% per year and yet, Bush-Cheney declares this to be an economic recovery unleashed. The second of their three charts that will put new meaning into misleading graphics notes one forecast (from Macro Economic Advisors) that suggests we will enjoy growth of “nearly 20% over the next five years”. Wow – a nine-year period where total growth was only 30% or about 3% per year. At this rate, we might see a return to full employment by 2020.
Most of this chapter uses hyped-language to boost of all the aid the government will give us but a cynical reader might wonder if this aid will be from a “tin cup” as Senator Kennedy once said. But when the read gets to “Fostering Economic Prosperity”, maybe one hopes that government spending will not increase by very much as the centerpiece of this section seems to be:
In 2000, George W. Bush ran for President on a promise of lowering taxes, allowing the American people to keep more of what they earn. President Bush believes that our economy grows when families and businesses have more of their own money to spend and invest… This tax relief must be made permanent so families and businesses can plan for the future with confidence…President Bush will work with Congress to make the tax code simpler for taxpayers, encourage saving and investment, and improve the economy’s ability to create jobs and raise wages.
Of course, one does not increase the nation’s savings and investment using long-term deficit financing. But then this chapter makes the brazen claim:
The President has put our country on a path toward cutting the budget deficit in half over the next five years. In the critical areas of defense and homeland security, the President is spending wisely … Pesident Bush will build on this budget discipline by supporting budget rules that make Federal spending conform to the kind of constraints and common sense known to every family.
The third graph makes three claims that it graphs in a distorting way: (a) that Federal spending will be 20.1% of GDP in 2004, (b) the historical average for Federal spending as a share of GDP is 19.5%; and (c) that Federal spending will fall to only 19.1% of GDP by 2009. The chapter fails to tell us over what period this historical average was drawn. But more importantly, the chapter’s only suggestion for cutting back on Federal spending is some alleged reduction in $35 billion per year of waste, which of course is far short of the alleged reduction in spending equal to 1% of GDP.
Maybe the person who reviewed this document for logical consistency should sign up for some of the remedial education courses promised in this document. Beyond its logical inconsistency, it is unclear how this “Agenda” would restore full employment, provide for more investment and long-term growth, or reduce the massive Federal deficit, which is rapidly increase the Federal debt to GDP ratio.