Senate Democrats

Bush Administration Blind To The Economic Reality Facing Americans

Today, both President Bush and Secretary Paulson will attempt to ease America’s concerns about the nation’s struggling economy. Unfortunately, rhetoric alone does not address this growing concern. In Cook County, Illinois, the location of the President’s speech, close to 29,000 homes are projected to be lost to foreclosure, the second highest in the nation. In addition, almost two-thirds of homeowners in the county will see their property values affected. Worse still, Illinois continues to lose manufacturing jobs at an alarming rate. Since Bush took office, the state lost close to 18,000 (1 out of 5) manufacturing jobs. While Bush continues to claim the fundamentals of the economy remain strong, economic indicators tell a different story.

Leading economists begin to sound the alarm of an economic slowdown:

J.P. Morgan’s Chief Economist, Voiced Concerns About The Economy Slipping Into a Recession. Bruce Kasman, the chief economist at J.P. Morgan said, “The big issue here is whether you start to see the housing weakness seep into broader household and business decisions.” The investment bank last Friday said the odds of a recession are at 40 percent and estimated the economy would stall. [Wall Street Journal, 1/5/08]

Economists At Morgan Stanley Recently Voiced Concerns About the U.S. Economy Sliding Into a Recession. Some of the nation’s largest corporations began cutting profit forecasts in recent weeks as concerns mount about whether the world’s biggest economy will slide into a recession. “A mild recession is now likely,” economists at Morgan Stanley said in a research note released on December 10th, adding that further Fed rate cuts are also likely. Morgan Stanley also economists expect corporate earnings to contract by between five and 10 percent through much of 2008. [Agence France Presse, 12/11/07]

Harvard Economist Martin Feldstein, Former Chairman of the Council of Economic Advisers Worries the Economy is Teetering Toward a Recession. Feldstein, who was chairman of the of the Council of Economic Advisers under President Reagan and on the short list to succeed Alan Greenspan at the Fed, is worried that the economy will teeter into recession. When asked at an interview, ‘Will we see a recession?’ Feldstein responded, “At this point, there’s at least an even chance that unless policy is changed, we will see a recession begin in 2008.” [Business Week, 12/17/07]

Meanwhile as Americans begin to worry about losing their jobs and health care:

The Unemployment Rate for December 2007 Jumped to Five Percent, As More Jobs Are Lost Due to the Slowing Housing Sector. According to the Labor Department, The unemployment rate surged to 5 percent in December as the economy added a meager 18,000 jobs, the smallest monthly increase in four years. Worse yet, the nation shed 49,000 construction jobs and 31,000 manufacturing jobs. The 5 percent rate is up from 4.7 percent the month before. In a disturbing parallel shift, private-sector job creation turned negative for the month. If that weakness persists and worsens, it would echo what happened the last time the US entered a recession, in 2001.  [New York Times, 1/5/07; Christian Science Monitor, 1/7/07]

Number of Uninsured Has Risen by 7 Million on President Bush’s Watch. Between 2001 and 2006, the number of uninsured Americans has risen each year, from 39.8 million in 2001 to 47 million in 2006. [CBPP, 8/31/07]

Soaring costs: middle class Americans continue to feel the punch:

Consumer Confidence Has Dipped to a 15 Year Low. The University of Michigan’s consumer confidence index dropped to the lowest point in 15 years in early December, excluding the plunge after Hurricane Katrina hit in 2005, a statistic that does not bode well for retailers during the holidays. [Chicago Tribune, 12/8/07]

Health Care Costs Continue to Rise Far Faster Than Inflation. “By several measures, health care spending continues to rise at the fastest rate in our history. In 2005 (the latest year data are available), total national health expenditures rose 6.9 percent — two times the rate of inflation. Total spending was $2 TRILLION in 2005, or $6,700 per person… In 2006, employer health insurance premiums increased by 7.7 percent – two times the rate of inflation. The annual premium for an employer health plan covering a family of four averaged nearly $11,500. The annual premium for single coverage averaged over $4,200.” [National Coalition on Health Care, 2007 Facts]

According to Government Statistics, The Cost of Home Heating Oil, Crude Oil and A Gallon of Gas at the Pump Have Doubled Since Bush Took Office.

  • Cost of Gas at the Pump Has More Than Doubled Since Bush Took Office. When President Bush took office, regular unleaded gasoline cost $1.45 per gallon. By November 2007, the cost of a gallon of regular unleaded gasoline had risen to $3.08. [Energy Information Administration]
  • Cost of Crude Oil Has Also More Than Doubled Since Bush Took Office. On January 22, 2001, two days after President Bush was sworn in, the cost of a barrel of oil was $32.21. As of December 4, 2007, a barrel of crude oil cost $88.31. [Energy Information Administration]
  • Cost of Home Heating Oil Has More Than Doubled Since Bush Took Office. When President Bush took office in January of 2001, average residential cost of home heating oil was below $1.50 per gallon. As of November 2007, the average price of residential home heating oil had risen to $3.17 per gallon. [EIA, 2006; Energy Information Administration]

Average Cost of College Education Has Risen Nearly 40 percent in Last Four Years. The average cost of resident undergraduate college tuition and fees rose from $3,738 during the 2002-2003 school year to $5,192 during the 2006-07 school year, an increase of 38.9 percent in just four years. [Washington Higher Education Coordinating Board, “Tuition and Fee Rates: A National Comparison,” 3/07]