Bush: Economy Faces Challenges
For the first time, US President George W. Bush expressed concern about the American economy recently. Although he’s normally “upbeat,” this time he said that “the nation faces ‘economic challenges’ due to rising oil prices, the home mortgage crisis and a weakening job market.”
He acknowledged that “recent economic indicators have become increasingly mixed” and warned that “[w]e cannot take growth for granted.”
Although he expressed concern about the state of the economy, Bush “stopped short of warning that the nation may be about to enter a recession.” Of course, if he would ever use the word “recession” we can be sure that the economy would enter into a recession immediately. A kind of self-fulfilling prophecy.
Meanwhile, Democrats in Congress, Republicans and Bush himself “say they are considering whether a rescue package is necessary to counter the threat of a recession, in which economic activity declines and joblessness increases over an extended period of time.”
As the NYT points out, if they’d decide to do something, it would probably result in a major clash because “the two sides would undoubtedly take vastly different approaches.”
Bush will “probably favor broad-based tax cuts of the sort he pushed through early in his presidency,” whereas Democrats would probably emphasize more government spending in order to stimulate the economy (ala Keynes).
One wonders in how far it would be wise to, once again, safe the economy in an artificial manner. If there are serious economic problems, perhaps its better to let nature (or the free market) do what it has to do, while one tries to make it less bad on the citizens by cutting taxes.
What we can be sure about, however, is that the next president will not get into office in a period of big economic growth. In fact, it’s quite possible that he’ll be confronted with a recession. It would be interesting to know what the different presidential candidates plan to do if this is the case.
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