Since then, 2.1 million jobs have been recovered; in the last year alone, over 1.5 million jobs have been added. Manufacturing employment, often the whipping-boy of Democratic populism, reached a 30-year high last May. Unemployment has declined in the last year in 47 states. President Bush's tax relief proposals have enabled more and more Americans to invest in our economy-indeed, home ownership rates have never been higher, and in 2003, home ownership by minorities topped 50 percent for the first time in American history.
Additionally, increased spending, mostly in the Departments of Defense and Homeland Security, combined with the effects of Bush's sweeping tax cuts, has resulted in the most extraordinary budget deficits in a generation. The estimated shortfall for the previous fiscal year was about $521 billion, or about 4.5 percent of gross domestic product (GDP).
While this deficit is an issue of legitimate concern, it must be understood in both historical and strategic perspective. The budget deficit, as a percentage of the GDP, has been this large or larger six times in the past 25 years. The eight years of Clintonian prosperity did not come cheaply, either: the straitjacketing of our intelligence agencies, the reduction of the size of our armed forces and President Clinton's tendency to employ politically satisfying and strategically useless tactics-say, bombing Sudanese pharmaceutical factories from afar- may have pinched pennies, but, in the wake of Sept. 11, have been exposed as a fool's bargain.
President Bush, in short, inherited an economy on the precipice of decline and an undeclared war that America had begun to lose. Our next President will inherit the fruits of economic growth, spurred by President Bush's historic tax cuts, and a world in which American troops have taken the offensive, replacing two despotic regimes with budding, though delicate, democracies.
Let us judge Senator Kerry's economic proposals on their merits, by admitting their flaws and praising their strengths. On Sept. 7, Senator Kerry, while campaigning in Greensboro, N. C., said the following:
"Because of George Bush's wrong choices, this country is continuing to ship good jobs overseas-jobs with good wages and good benefits. All across America, companies have shut their doors, putting hardworking people out of a job, leaving entire communities without help or hope. And you know what George W. Bush's choice is? You know it's the wrong one. He's actually encouraging the export of American jobs."
Senator Kerry, for good reason, makes no mention of the number of jobs lost. According to the Bureau of Labor Statistics, it comes to about 4,200 jobs per quarter. Given that the American economy has been picking up jobs at the rate of about 6,000 per diem for the past year, Kerry's estimation of the economic effect of our "Benedict Arnold CEOs" is overblown.
His promise, however, to "fight for an even playing field for American workers" is not to be underestimated. If fulfilled, it means tariffs, counter-tariffs and all the sour fruits of protectionism, which will certainly not help Kerry bring our European allies to heel. If Kerry made good on his rhetoric, increased trade barriers might well require the withdrawal of those European 'Benedict Arnold' corporations who employ hundreds of thousands of Americans. While Kerry spoke the language of economic isolationism, 4,700 Americans were earning their paychecks, just around the corner, in Spartanburg, S. C. at a factory owned by BMW.
All of this, however, pales next to Kerry's spending proposals. The Congressional Budget Office estimates that Senator Kerry's campaign promises would result in $1.9 trillion in new spending. This, Senator Kerry would have us believe, will be financed by the roll-back of Bush's tax cuts for Americans making over $200,000 per year. Again, skepticism is called for. Who makes more than $200,000 per year in this country? Michael O'Guin, for one. O'Guin described his situation in a letter to the Editor in the Wall Street Journal.
"I grew up in a lower-middle-class household. I studied hard and put myself through a good college. Ten years ago, I started my own company and for the past four years my income has exceeded $200,000 a year. Last year, I paid 40 percent of my income for self-employment, state and federal income taxes. From the remaining, I support five people, pay for health insurance and save for retirement."
The super-rich are savvy enough to stash their cash in tax shelters. Teresa Heinz-Kerry, for example, who has assets valued at about $500 million-including income from her foundation-pays about two percent of her income in taxes. Two thirds of Americans who make more than $200,000 per year are people like Michael O'Guin: small-business owners whose dynamism drives the American economy. Punishing these people for their financial success is the best way to end the Bush recovery.
While some of Kerry's proposals, most notably his pledge to add 40,000 active duty troops to the Armed Forces, deserve careful consideration, most of his economic pledges are populist pabulum that would do more harm than good to an economy already in recovery. President Bush, in contrast, has led the country out of recession. Those who will cast their votes against Bush for emotional reasons will not be persuaded, but any voter who claims objectivity must honestly weigh Bush's considerable achievements with the failures that a Kerry administration could conceivably bring.