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Conservative Economic Rhetoric vs. Reality

Rhetoric: “There are more Americans working today than ever before.” – Heritage Foundation, Issues 2004

Reality: The American economy has lost nearly 2 million jobs since President Bush was elected – the worst record of job losses during a recovery since Herbert Hoover.

Reality: The unemployment rate has gone from 4.2 percent to 5.7 percent under Bush, and increased again just last month.

Rhetoric: “America’s economy is strong and getting stronger. . . and new jobs were created in March.” – President Bush, April 2, 2004

Reality: The past few years have seen the worst monthly average job creation during a recovery in over 60 years.

Reality: No other post-war administration has had as few good months of good labor market performance as the Bush administration. This includes the Kennedy and Ford administrations, which were in office for shorter periods of time than Bush’s has been.

Rhetoric: “The unemployment rate edged up slightly to 5.7 percent [in March], which is low by historical standards …. [I]t is already within the healthy range that most economists consider close to full employment.” – Heritage Foundation, Web Memo #468

Reality: The unemployment rate is low because many workers have simply given up looking for work. If this “missing labor force” were properly counted, the unemployment rate would average well above 7 percent.

Reality: The unemployment rate has risen from a low point of 3.9 percent in December 2000 and remained consistently at or above 5.6 percent for several months. In fact, the unemployment rate was 5.6 percent when the recovery started in November 2001.

Rhetoric: “Average real wages have risen by 3 percent over the last three years.” – Heritage Foundation, Issues 2004

Reality: According to the Economic Policy Institute, 2003 was the worst year since 1998 for growth in real (inflation adjusted) hourly wages. While GDP has been growing strongly – 4.1 percent in the fourth quarter following 8.2 percent in the third quarter of 2003 – total wage and salary income saw meager increases of 0.8 percent and 1.3 percent at the same time.

Reality: Wages have increased by less than 1 percent since the start of the recession through January 2004. That increase is at about half the rate of prior recoveries.

Rhetoric: “The conservative remedy of lower taxes and free trade halted the recession in its tracks.” – Heritage Foundation, Issues 2004

Reality: President Bush’s tax cuts have made it harder for Americans to find jobs because they were targeted towards the rich, created enormous deficits and put economic growth in jeopardy.

Reality: Most American households received less than the average tax cut (in 2003 the average cut was $1800, but the majority of Americans got less than $850 in tax cuts). Gains from these cuts were more than offset by cost increases in medical care (up 4.5 percent since last year), tuition (up 28 percent over the last three years) and housing. Government expenditures for programs that help working families to meet these rising costs have now been reduced to pay for the tax cuts.

Rhetoric: “More students are receiving federal Pell grants than when President Bush took office.” – Rod Paige, Secretary of Education, March 4, 2004

Reality: Financial aid is primarily based on family income. Median household income, according to the U.S. Census Bureau, has fallen for the last two years for which data is available (2001 and 2002).

Reality: College tuition has gone up 28 percent over the last three years. Financial aid – much of which comes in the form of loans – has not been able to offset these costs. That is despite an alarming rise in debt among recent college graduates, families are still struggling to pay the bills.

Rhetoric: “Even if you don’t have health insurance you are still taken care of in America. That certainly could be defined as universal coverage.” – Secretary Of Health And Human Services Tommy Thompson, Seattle Times, March 3, 2004.

Reality: The number of people with health insurance rose by 1.5 million and the number without increased by 2.4 million from 2001 to 2002. Currently, 43.6 million Americans lack health insurance. As health insurance coverage is declining, out-of-pocket medical expenditures rise. From 2000 to 2003, inflation adjusted out-of-pocket expenditures rose by more than 7 percent taking a bite out of consumption for other items.

Reality: The overwhelming majority of Americans without health insurance say they don’t have it because it is too expensive. Only 5 to 7 percent report that they don’t need or don’t want healthcare coverage.

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