How well is Bush’s economy doing? It couldn’t be better! As long as you’re incredibly wealthy. For the rest of us, things aren’t going so well. A large dose of bad economic news came out within the past day. Oh, and surprise, surprise: economists’ predictions were way off once again.
From the AP: “Consumer confidence plunged, the wholesale inflation rate soared, the number of homes being foreclosed jumped, home prices fell sharply and a report predicts big increases in health care costs.”
The details on each:
The Consumer Confidence Index plunged in February to 75.0 from a revised 87.3 in January. Economists were predicting a decrease to 83.0 . Oops.
The Labor Department said Tuesday that wholesale prices rose 1 percent last month, more than double the 0.4 percent increase that economists had been expecting. Oops. Imagine if your local weatherman missed the forecasted precipitation by half. Your neighbors would be calling for their head on a platter. Not so with economists.
What did that increase in monthly wholesale prices do to inflation? “The January surge left wholesale prices rising by 7.5 percent over the past 12 months, the fastest pace in more than 26 years, since prices had risen at a 7.5 percent pace in the 12 months ending in October 1981.” That’s 7.5% inflation. Did your salary increase by 7.5% last year? Mine sure didn’t.
“The number of homes facing foreclosure jumped 57 percent in January compared to a year ago, with lenders increasingly forced to take possession of homes they couldn’t unload at auctions, a mortgage research firm said Monday.” This time last year, economists were debating whether a housing bubble even existed. Have you ever seen two meteorologists dispute whether a storm might come in when it’s already there? Didn’t think so.
“U.S. home prices lost 8.9 percent in the final quarter of 2007, Standard & Poor’s said Tuesday, marking a full year of declining values and the steepest drop in the 20-year history of its housing index. ” More and more people owe more on their mortgage than the house is worth. Go, go Bush economy!
One of the major issues on the mind of every voter, regardless of party is health care. How’s that industry looking? “By 2017, total health care spending will double to more than $4 trillion a year, accounting for one of every $5 the nation spends, the federal government projects. ” The article goes on to mention the annual increases in spending is 3X the rate of inflation. I’m not sure which inflation number they’re comparing to.
The article ends with: “With the aging population, the federal government will be picking up the tab for a growing share of the nation’s medical expenses. Overall, federal and state governments accounted for about 46 percent of health expenditures in 2006. That percentage will increase to 49 percent over the next decade.”
Not if Bush has anything to say about it. See, here’s the best part about conservative economic policies. If you cut taxes far enough, the federal government can’t meet it’s obligations to its most successful programs: Medicaid and Medicare. Money that helped fund community health centers goes away. Remember, we’re wasting over $2 Billion per week by occupying Iraq. That’s a lot of health care the government isn’t providing to its taxpaying citizens.
So the responsibility moves to state governments. Guess what? Republicans have been hard at work for over 30 years at the local and state level to lower taxes. Which sounds really great, right? You get to keep more of your own money! Well, when the federal government can’t support its programs, forcing state governments to pick up the slack, and state governments have their hands tied, programs disappear. Republicans, with their me-first world-view, prevent communities from banding together to reduce risks and lower everybody’s overall costs.
The last point to be made: Tax breaks do not strengthen the economy. After seven years of successfully implementing conservative economic policies, we see once again they only lead to high inflation, low home ownership and recessions.