Column - The Naysayers Were Wrong

The Naysayers Were Wrong
Rep. Boozman's Column for the Week of July 18, 2005

Washington, Jul 18 - Remember back when we began the debate about how we could revitalize the sluggish economy, and how opponents of our pro-growth economic plan said that it would bankrupt the country and run us into a recession? They painted a doom-and-gloom picture of rampant unemployment and a rising deficit that would never fall. As we have learned recently, this picture was way off the mark.

First, let's start with the outrageous claims that tax relief would cause lines out the door at unemployment offices across the country. In reality, job growth has steadily increased since we passed the two landmark economic stimulus packages in 20001 and 2003. In fact, the economy has added 3.7 million jobs since May 2003.

Employment figures released by the U.S. Department of Labor this month show no signs of the negative picture our opponents painted during the debate over economic policy. Jobs are up, unemployment is down, earnings are up and the duration of unemployment lengths are down. In fact, it showed that the unemployment rate is moving down faster than expected. It now stands at 5 percent, which is a level of unemployment unseen since September 2001. This number is a lower unemployment rate than we saw throughout the 1990's, where it averaged 5.8 percent, and the 1980's, where it averaged 7.3 percent.

There is no doubt that job creation would not be pushing along at this pace without the action taken by Congress. The two stimulus bills did exactly what we hoped they would, which was to jumpstart the economy and create an environment where businesses would begin adding employees to their payroll.

The idea of an out of control deficit pushed by opponents of tax relief also holds little water after the Office of Budget Management (OMB) released a dramatically reduced deficit projection for this fiscal year. OMB stated that the federal budget deficit for Fiscal Year 05 (FY05) is now projected to be $333 billion as opposed to the much higher earlier estimate of $427 billion. OMB's estimate is backed up by a revised estimate by the Congressional Budget Office (CBO) which forecasts a deficit of less than $350 billion and possibly less than $325 billion.

Both OMB and CBO credit these improvements to higher-than-anticipated tax revenue from corporations and individuals. This increased revenue is a result of a stronger economy, which was generated by the pro-growth policies enacted by Congress and President George W. Bush. It's the outcome I was confident we would get when I voted for these stimulus packages and the exact opposite of the outcome that opponents of tax relief often described.

The economy has grown for fourteen consecutive quarters, exports are on the rise and homeownership rates are at an all-time high. The deficit is shrinking and employment is on the rise. Our policy of spending restraint and tax relief gave a struggling economy a shot in the arm. Naysayers may never admit that this was the right prescription, but they don't need to when the numbers make such a strong case on their own.

http://www.boozman.house.gov/News/DocumentSingle.aspx?DocumentID=30642