Clinton
During Clinton's tenure, the U.S. enjoyed continuous economic expansion, reductions in unemployment, and growing wealth through a massive rise in the stock market. The economic boom ended shortly after his term ended, possibly indicative of a stock market bubble; Although the reasons for the expansion are continually debated, Clinton proudly pointed to a number of economic accomplishments, including:
1. More than 22 million new jobs
2. Homeownership rate increase from 64.0% to 67.5%
3. Lowest unemployment in 30 years
4. Higher incomes at all levels
5. Largest budget deficit in American history converted to the largest surplus of 6. over $200 billion
7. Lowest government spending as a percentage of GDP since 1974
8. Higher stock ownership by families than ever before
The reasons for this growth are hotly debated, but many cite his 1993 tax increase which is generally acknowledged to have reduced the deficit, which in turn lowered interest rates, which spured comsumption and consumer spending. Alan Greenspan supported this plan, which was approved by Congress without one Republican vote. His critics credit solely Alan Greenspan, the Republican Congress' 1995 spending cuts, the Contract with America initiatives, or even Ronald Reagan's 1981 tax cut during the 1980's.
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Bush
During his first term, Bush sought and obtained Congressional approval for three major tax cuts, which increased the standard income tax deduction for married couples, eliminated the estate tax, and reduced marginal tax rates, and are scheduled to expire a decade after passage. Bush has asked Congress to make the tax cuts permanent. According to the Center on Budget and Policy Priorities, by 2003 these tax cuts had reduced total federal revenue, as a percentage of the Gross Domestic Product (GDP), to the lowest level since 1959.
The effect of the tax cuts and simultaneous increases in spending was to create record budget deficits. The annual deficit reached record current-dollar levels of $374 billion in 2003 and $413 billion in 2004, though as a percentage of GDP these deficits are lower than the post-World War II record set under the Reagan administration in the 1980s.
In an open letter to Bush in 2004, more than 100 professors of business and economics at U.S. business schools ascribed this "fiscal reversal" to Bush's "policy of slashing taxes - primarily for those at the upper reaches of the income distribution". Bush's supporters have countered that, primarily because of the doubling of the value of the child tax credit, "7.8 million low and middle-income families had their entire income tax liabilities erased by the cuts."
According to the "baseline" forecast of federal revenue and spending by the Congressional Budget Office (in its January 2005 Baseline Budget Projections, the trend of growing deficits under Bush's first term will become shrinking deficits in his second term. In this projection the deficit will fall to $368 billion in 2005, $261 billion in 2007, and $207 billion in 2009, with a small surplus by 2012. The CBO noted, however, that this projection "omits a significant amount of spending that will occur this year--and possibly for some time to come--for U.S. military operations in Iraq and Afghanistan and for other activities related to the global War on Terrorism." The projection also assumes that the Bush tax cuts "will expire as scheduled on December 31, 2010." If, as Bush has urged, the tax cuts were to be extended, then "the budget outlook for 2015 would change from a surplus of $141 billion to a deficit of $282 billion."
Inflation under Bush has remained low. The recession and a drop in some prices led to concern about deflation from mid-2001 to late-2003. More recently, high oil prices have caused concern about increasing inflation. So far, the economy has withstood these threats.
Unemployment percentage, 2000 - 2005Private employment has decreased significantly under Bush according to the Bureau of Labor Statistics. After private employment (seasonally adjusted) peaked at 111,680,000 in December 2000, it dropped to 108,250,000 in mid-2003. The percentage drop in jobs was the largest since 1981-1983.
The economy has added jobs for 25 consecutive months, but the employment level remained below the pre-Bush level until June 2005 when it reached 111,823,000 (preliminary). Considering population growth, that still represents a 4.6% decrease in employment since Bush took office.
Unemployment levels under Bush started at 3.9% in December 2000, peaked at 6.3% in June 2003, retreated to 5.0% in July 2005, and appear to be generally declining. The economy has added 1.924 million jobs so far in 2005.
The rise in GDP since the recession was undergirded by substantial gains in labor productivity, in part due to layoffs of underutilized workers. Long-term problems include inadequate investment in economic infrastructure, rapidly rising medical and pension costs of an aging population, sizable trade and budget deficits, and stagnation of family income in the lower economic groups.
Poverty Rate, 1973 to PresentWhile the GDP recovered from the recession early in Bush's term, poverty has since worsened under Bush according to the Census Bureau. This might be due to the concentration of wealth being in fewer hands. The percent of the population below the poverty level increased in each of Bush's first four years, while it decreased for each of the prior seven years to a 26-year low. At 12.7% in 2004, it is still lower than at any time during the Reagan and Bush I administrations.