The Kerry campaign has defined the economy in terms of the weaker payroll survey numbers. But the most comprehensive measure of economic output is still the gross domestic product, adjusted for inflation. Hopefully, President Bush will emphasize GDP in the remaining weeks of the campaign. During the ten recovery quarters since the end of 2001, real GDP growth has averaged 3.4 percent, in line with its long-run post-WWII annual expansion average of the past 57 years. Over the past four quarters since the supply-side tax cuts legislated in the spring of 2003, real economic growth has jumped to 4.8 percent.
What?s more, personal income is growing at 5 percent over the past year. This measure includes wages, salaries, rents, interest, dividends, and Social Security payments. Like GDP, it is a comprehensive measure of the economy?s progress, especially in terms of individual and family economic power. Adjusting for inflation, real income has increased 2.6 percent over the past year, a hefty gain. Total compensation, which reflects wages, salaries, and non-cash and non-taxable benefits like healthcare, has grown 3.9 percent (adjusted for inflation) over the past year.
These are all solid numbers. They show a healthy and growing economic prosperity. Mr. Bush should use these data to rebut Sen. Kerry?s silly charge that this is somehow a Herbert Hoover economy.
John Kerry, as we know, has a fondness for Europe. But their GDP is growing by less than 2 percent. Their unemployment rate is close to 10 percent.
Bush has nothing to be ashamed of. The resilient, durable, free-market U.S. economy, bolstered by supply-side tax cuts, has in fact delivered the jobs and the goods. This is especially remarkable in view of all the negatives thrown at us, such as a busted technology bubble, a recession, massive corporate scandals, the 9/11 attacks, two wars, and more recently an oil-price shock. With all that, the U.S. economy is growing roughly three-times faster than Europe?s, with an unemployment rate that is only half what it is on the other side of the pond.
Hopefully Bush will hammer all these points home in Wednesday evening?s forthcoming debate.