The latest claims by President Bush about "our thriving economy" are further evidence that he is totally out of touch with the realities facing America's shrinking middle class. "What planet is he living on? Senator Bernie Sanders asked.
"I am sick and tired of the president telling us how great the economy is when every working American knows that is not true," Sanders said. "The millionaires and billionaires he showered with special tax breaks may be making out alright, but the Bush economy has been a disaster for everyone else."
The president's comments came Wednesday at the conclusion of a meeting with economic advisors at the U.S. Department of Treasury. Sanders was in Rutland, Vt., for the second in a week-long series of meetings on jobs and public works needs in economically hard-pressed communities.
"While the president tells us how the economy is ‘thriving,' the American people understand how wrong he is," Sanders added. A recent Wall Street Journal/NBC News poll, he noted, found that more than two-thirds of Americans believe the U.S. economy is either in recession now or will be in the next year.
Since the president took office, Sanders added, 5.4 million Americans have slipped out of the middle class and into poverty; nearly seven million Americans have lost their health insurance; median household income has gone down by nearly $1,300; three million manufacturing jobs have been lost; the real earnings of college graduates have gone down by about 5 percent; entry level wages for male and female high school graduates have fallen by 3.3 percent and 4.9 percent, respectively; and three million American workers have lost their pensions.
Home foreclosures are now the highest on record; the personal savings rate is lower than at any time since before the Great Depression; wages and salaries are at the lowest share of gross domestic product since 1929; and the top 300,000 Americans now earn nearly as much income as the bottom 150 million Americans combined.
A member of the Senate Budget Committee, Sanders has cited the president's disconnect with economic reality in opposing confirmation of former Rep. Jim Nussle to be the White House budget director. The Senate has scheduled three hours of debate on the Nussle nomination as the first order of business when Congress reconvenes on September 4.
At the Treasury Department meeting, Bush touted his management of the economy and made false claims about the how Congress has handled the budget. The fact is under President Bush, job growth has been far below historic standards, unemployment has been higher than when he took office and workers are being squeezed as wages have not kept up with costs. Bush also has turned record surpluses into record deficits, increasing debt by $3 trillion and allowing runaway spending.
Here is more from the Joint Economic Committee:
Middle Class Squeeze
Real Earnings Growth Since 2000 Has Been Much Weaker And More Unequal Compared With The Late 1990s. The typical worker's real (inflation-adjusted) weekly earnings fell by 0.4 percent between 2000 and 2006, compared with a gain of 7.2 percent between 1994 and 2000. Moreover, while it was weak overall, earnings growth between 2000 and 2006 was faster for those in the upper half of the income distribution than it was for those in the lower half, and earnings for those at the very bottom declined. In contrast, growth during the second half of the 1990s was uniformly strong across the wage distribution.
Real Household Income Has Declined For All Income Groups Since 2000. After adjusting for inflation, the income of a typical household fell by almost $1,300, or 2.7 percent, between 2000 and 2005, the latest year for which we have data. Households in the poorest fifth of the income distribution have experienced the greatest declines (7.5 percent), while those at the top experienced the smallest declines (1.0 percent).
Despite Strong Productivity Gains, Real Hourly Compensation Growth is Lagging. Historically, economy-wide increases in workers' pay have tended to track economy-wide increases in productivity (output per hour). However, while productivity in the nonfarm business sector rose by 17.8 percent between the fourth quarter of 2000 and the first quarter of 2007, real (inflation-adjusted) average hourly compensation (wages plus benefits) increased by only 9.8 percent over the same period.
Explosive Health Care Costs Are Squeezing Family Incomes. Between 2005 and 2006, health insurance premiums rose at more than twice the rate of workers' earnings. Between 2000 and 2006, the average monthly premium paid by workers with health coverage rose 57 percent.
Rising Energy Costs Are Eating Into Families' Budgets. The price of gasoline has more than doubled since July 2001, when the average gallon of regular grade gas cost $1.42. Six years later, in July 2007, that same gallon of gasoline cost $2.97, reaching a high of $3.22 the week of May 21.
College Tuition Growth Continues To Outpace Inflation. Over the past several years, tuition has risen at more than double the rate of inflation. Between the 2000-01 and 2005-06 academic years, average public college tuition and fees increased by 40 percent—the fastest rate of growth over any five-year period since the 1970s. Nearly two-thirds of college students graduate with debt, with the typical debt load approaching $20,000.
Jobs and Unemployment
President Bush Is Tied for the Worst Jobs Creation Record of Any President in the Past 70 years. President Bush is in a statistical dead heat with his father for the worst job creation record of any President since Herbert Hoover, with just 5.7 million more total jobs (nonfarm private sector and government payrolls) than there were when he took office in January 2001. That is a paltry job creation pace of just 72,000 total jobs per month.
Manufacturing Payrolls Have Declined By Over 3 Million Jobs Since President Bush Took Office. Manufacturing has been particularly hard hit, with payrolls declining by over 3.1 million jobs between January 2001 and July 2007.
Unemployment Rate Remains Higher than When President Bush Took Office. July's unemployment rate of 4.6 percent, though down from its peak of 6.3 percent in June 2003, is higher than the historic lows achieved in the late 1990s.
Long-term Unemployment Remains High. The number of people unemployed for more than 26 weeks is 93 percent higher than it was when President Bush took office. In July 2007, nearly one in five of the unemployed (18.4 percent) has been unemployed for more than 26 weeks.
The Current Economic Expansion is the Slowest of the Postwar Period. In the 25 quarters since the first quarter of 2001, the overall economy has grown at a 2.5 percent average annual rate. That is the slowest growth of any expansion in the postwar period. While the economy grew at a 3.4 percent annual rate in the second quarter of this year, that was largely a rebound from its anemic 0.6 advance in the first quarter.
Sub-Par Growth Expected to Continue Through This Year and Next. Leading economic forecasters expect economic growth to slow from its second-quarter pace in the current and coming quarters. The Federal Reserve, for example, believes it likely that economic growth will be less than 3 percent in the second half of this year and continue to lag through the first half of next year.
Debt and Deficits
The Budget Would Be In Surplus If Not for the Deficit-Financed Bush Tax Cuts. The CBO's recent analysis confirms that without the 2001 and 2003 tax cuts (EGTRRA and JGTRRA), the budget would be in surplus this year. That holds even when accounting for any "dynamic" effects of the tax cuts on the economy, which the CBO says "have largely dissipated by now" and are "probably small." The CBO estimates that the cost of the tax cuts in 2007 alone, including debt service, is $211 billion, and even with "dynamic" offset is at least $195 billion. (The CBO's latest projection of the 2007 deficit - to be updated later this month - is $177 billion.)
Low National Saving Is Partly Responsible For A Weak Economy. The weakness in the economy in large part stems from the lack of adequate national saving. Experts have testified at recent hearings that the decline in national saving since 2001 has been driven in large part by the record budget deficits. A projected $5.6 trillion budget surplus has turned into a $2.4 trillion deficit - a dramatic $8.0 trillion deterioration. The dependence of economic growth on national saving, and of national saving on public saving, is one of the most important reasons why deficits do matter.
The Joint Economic Committee, established under the Employment Act of 1946, was created by Congress to review economic conditions and to analyze the effectiveness of economic policy.