Against all odds, and despite the usual drumbeat of criticism, President George W. Bush has had a very good year. The troop surge in Iraq is succeeding. America remains safe from terrorist attacks. And the Goldilocks economy is outperforming all expectations.
At his year-end news conference, President Bush stated with optimism that the economy is fundamentally sound, despite the housing downturn and the sub-prime credit crunch. The very next day, that optimism was reinforced with news of the best consumer spending in two years. The prophets of recessionary doom, such as former Fed chair Alan Greenspan, Republican advisor Martin Feldstein, ex-Democratic Treasury secretary Lawrence Summers, and bond-maven Bill Gross have been proven wrong once again.
Calendar year 2007 looks set to produce 3 percent growth in real GDP, nearly 3 percent growth in consumer spending, and over 3 percent growth in after-tax inflation-adjusted incomes. Meanwhile, headline inflation (including food and energy) will have run at 2.5 percent, with only 2 percent core inflation.
Jobs are rising over 100,000 per month and the stock market is set to turn in a respectable year despite enormous headwinds. Low tax rates, modest inflation, and declining interest rates continue to boost Goldilocks, which is still the greatest story never told.
Bush’s optimism is well-earned, in Congress too. He has stopped a lot of bad legislation on higher taxing and spending. He won on S-CHIP and the alternative minimum tax. He mostly prevailed on domestic spending. And he got much of what he wanted on war funding without any pullout dates.
And he’s not yet finished. In the most dramatic statement of his holiday news conference, Bush said he will not stand for the continuing congressional proliferation of pork-barrel earmarks.
“Another thing that’s not responsible is the number of earmarks the Congress included in the massive spending bill,” said Bush. “The bill they just passed includes about 9,800 earmarks. Together with the previously passed defense spending bill, that means Congress has approved about 11,900 earmarks this year. And so I am instructing budget director Jim Nussle to review options for dealing with wasteful spending in the omnibus bill.”
This is huge. The statute of limitations for Republican overspending, over-earmarking, and over-corrupting that caused huge congressional losses in last year’s campaign will not run out until the GOP shows taxpayers that it again can be trusted on the key issues of limited government and lower taxes.
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