Gary E. Marsella www.garyemarsella.com

Polling data on the economy:
Why are the numbers so low on Bush’s handling of the economy?
July 10, 2005

      The low numbers from polls on the economy are difficult for me to explain when most of the economic data coming out from the news media, as much as they hate to admit it, is basically positive. Could it be that the people who are being polled have no clue as to what the economy is actually doing or are the pollster’s questions so ambiguous that the respondents can only answer in one way?

Let me try and address the current state of the economy.

  1. The so-called tax cuts for the rich have helped the economy grow and has resulted in an unemployment rate of 5.00%. Compare this rate with 12.3% for Belgium, 11.8% for France, 8.00% for Italy, 10.00% for Spain and an average for the Euro area of 8.90%.
  2. Higher tax receipts are now reducing the budget forecast. Since the bottom 50% of tax payers pay less than 5.00% of total federal taxes, it must be that the so-called rich , corporations and individuals in high tax brackets are paying more.
  3. The Laffer Curve, which states that as marginal tax rates are reduced, tax revenues increase. The Bush tax cuts on dividends and capital gains has proven to be a boom to the 90 million investor- class Americans. Despite the hand wringing of the skeptics, federal tax revenues have surged in the first 8 months of this fiscal year by $187 Billion.
  4. The percentage change in real GDP estimate by the Economist surveys , show the United States with a projected 3.50% for 2005 verses 1.40% for Japan, 1.40% for the Euro-area and 2.60% for Canada.
  5. The USA’s projected inflation rate of 2.90% is higher than the 1.80% projected for the Euro-area, for 2005.
  6. The price of oil might be the reason that the economy is perceived as negative. We have not built a refinery in 30 years in this country due to objections on environmental concerns. We have done very little to find new sources of oil despite large potential deposits in ANWAR.
In summary, despite the favorable stats on the economy, the news media continues to downplay any positive forecasts and results. I challenge the American consumer to find real negative signs at present. Try and find a builder or someone to re-model or repair a residence and you will find a waiting list to get a job completed. Our economy is not perfect, but if it is so bad, do you see many of our citizens exporting themselves to Europe and other places to find better jobs?

Gary E. Marsella

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