http://www.iht.com/articles/537011.html Floyd Norris: Uncle Sam is source of wage boost Big government is back. And while that fact may not exactly have been heralded at Madison Square Garden at the Republican National Convention this week, it is largely responsible for the best long-term economic statistic that Republicans cited as they made the case for giving President George W. Bush a second term. . By one measure, Bush has presided over the largest expansion of government since his father and may yet beat him out in that category, which is not exactly one that conservatives like to boast about. That category is the share of national wage and salary income that comes directly from governments. And it turns out that this fact is largely responsible for the economic good news. . In the Republican platform, most of the economic statistics referred to recent months. "Over the last year," the Republicans stated, "gross domestic product grew at one of the fastest rates in two decades." It reported that "since last August, 1.5 million new jobs have been created." . Such numbers ignore the recession at the beginning of the Bush administration, and the slow recovery that followed until growth took off in mid-2003, when one tax cut - the child credit - put significant cash in the pockets of parents just in time to make that year's back-to-school shopping season a very good one. . But one statistic did stand out: "Real after-tax incomes are up by 9.6 percent since December 2000." . That statistic was through June. This week, the government updated it, and the figure through July is a little better, up 9.7 percent. That is a respectable number, and it helps to explain why consumer spending remained strong during the downturn. . The tax cuts that Bush pushed through Congress were a big reason for the gain. Adjusted for inflation, taxes paid in July were down 23 percent from December 2000, the last month of the Clinton administration. (All numbers are at seasonally adjusted annual rates.) . What else contributed to the increase? Private businesses are paying a lot more for employee benefits, principally the cost of health care. Those costs are up 22.6 percent, adjusted for inflation. And government spending on benefit programs, principally Social Security, Medicare and Medicaid, is up 18.7 percent. All that spending counts in disposable personal income, and it makes the overall number look better. But few of us feel better off when health insurance premiums go up. . In the area people think of when they hear about personal income, wage and salary payments, the picture is not as pretty. The entire increase there comes from the government payroll. Adjusted for inflation, private industry is paying almost exactly the same amount as in 2000. . Checking the numbers as far back as 1959, the earliest available, no previous administration has seen such a small gain - less than one-tenth of 1 percent - in private industry's real wage and salary payments over a similar period. The previous low was 1.4 percent, in 1988-1992, under the current president's father. Ranking third on that list of small gains, at 3.3 percent, was the Nixon-Ford administration from 1972 to 1976. In both 1976 and 1992, Republican incumbents were defeated. . The share of wage and salary income coming from the government can be seen as a measure of the size of government relative to the economy. It began to rise in the 1950s and peaked in the second quarter of 1975, under Gerald Ford, at 21.8 percent of total wage and salary income. It declined under Jimmy Carter and Ronald Reagan, rose a little under the first President Bush and then fell rapidly under Bill Clinton, hitting a low of 16 percent - the lowest level since Dwight Eisenhower was in the White House - in late 2000. . It has risen under the current administration. The latest quarterly figure showed 17.4 percent of all wage and salary payments came directly from the government. . Some of that is simple economic cycles. Government salary payments tend to rise less rapidly than private ones in good times and not to fall in bad ones. But it is also an indication that this administration has not managed to cut the size of government. . A bigger government and tax cuts are the major reasons that real personal incomes are up since 2000. The big question for the economy is whether the stimulus has been enough to produce a self-reinforcing recovery. More signs that the private economy has turned around will be needed before that can be deemed a sure thing. . com Big government is back. And while that fact may not exactly have been heralded at Madison Square Garden at the Republican National Convention this week, it is largely responsible for the best long-term economic statistic that Republicans cited as they made the case for giving President George W. Bush a second term. . By one measure, Bush has presided over the largest expansion of government since his father and may yet beat him out in that category, which is not exactly one that conservatives like to boast about. That category is the share of national wage and salary income that comes directly from governments. And it turns out that this fact is largely responsible for the economic good news. . In the Republican platform, most of the economic statistics referred to recent months. "Over the last year," the Republicans stated, "gross domestic product grew at one of the fastest rates in two decades." It reported that "since last August, 1.5 million new jobs have been created." . Such numbers ignore the recession at the beginning of the Bush administration, and the slow recovery that followed until growth took off in mid-2003, when one tax cut - the child credit - put significant cash in the pockets of parents just in time to make that year's back-to-school shopping season a very good one. . But one statistic did stand out: "Real after-tax incomes are up by 9.6 percent since December 2000." . That statistic was through June. This week, the government updated it, and the figure through July is a little better, up 9.7 percent. That is a respectable number, and it helps to explain why consumer spending remained strong during the downturn. . The tax cuts that Bush pushed through Congress were a big reason for the gain. Adjusted for inflation, taxes paid in July were down 23 percent from December 2000, the last month of the Clinton administration. (All numbers are at seasonally adjusted annual rates.) . What else contributed to the increase? Private businesses are paying a lot more for employee benefits, principally the cost of health care. Those costs are up 22.6 percent, adjusted for inflation. And government spending on benefit programs, principally Social Security, Medicare and Medicaid, is up 18.7 percent. All that spending counts in disposable personal income, and it makes the overall number look better. But few of us feel better off when health insurance premiums go up. . In the area people think of when they hear about personal income, wage and salary payments, the picture is not as pretty. The entire increase there comes from the government payroll. Adjusted for inflation, private industry is paying almost exactly the same amount as in 2000. . Checking the numbers as far back as 1959, the earliest available, no previous administration has seen such a small gain - less than one-tenth of 1 percent - in private industry's real wage and salary payments over a similar period. The previous low was 1.4 percent, in 1988-1992, under the current president's father. Ranking third on that list of small gains, at 3.3 percent, was the Nixon-Ford administration from 1972 to 1976. In both 1976 and 1992, Republican incumbents were defeated. . The share of wage and salary income coming from the government can be seen as a measure of the size of government relative to the economy. It began to rise in the 1950s and peaked in the second quarter of 1975, under Gerald Ford, at 21.8 percent of total wage and salary income. It declined under Jimmy Carter and Ronald Reagan, rose a little under the first President Bush and then fell rapidly under Bill Clinton, hitting a low of 16 percent - the lowest level since Dwight Eisenhower was in the White House - in late 2000. . It has risen under the current administration. The latest quarterly figure showed 17.4 percent of all wage and salary payments came directly from the government. . Some of that is simple economic cycles. Government salary payments tend to rise less rapidly than private ones in good times and not to fall in bad ones. But it is also an indication that this administration has not managed to cut the size of government. . A bigger government and tax cuts are the major reasons that real personal incomes are up since 2000. The big question for the economy is whether the stimulus has been enough to produce a self-reinforcing recovery. More signs that the private economy has turned around will be needed before that can be deemed a sure thing. . com Big government is back. And while that fact may not exactly have been heralded at Madison Square Garden at the Republican National Convention this week, it is largely responsible for the best long-term economic statistic that Republicans cited as they made the case for giving President George W. Bush a second term. . By one measure, Bush has presided over the largest expansion of government since his father and may yet beat him out in that category, which is not exactly one that conservatives like to boast about. That category is the share of national wage and salary income that comes directly from governments. And it turns out that this fact is largely responsible for the economic good news. . In the Republican platform, most of the economic statistics referred to recent months. "Over the last year," the Republicans stated, "gross domestic product grew at one of the fastest rates in two decades." It reported that "since last August, 1.5 million new jobs have been created." . Such numbers ignore the recession at the beginning of the Bush administration, and the slow recovery that followed until growth took off in mid-2003, when one tax cut - the child credit - put significant cash in the pockets of parents just in time to make that year's back-to-school shopping season a very good one. . But one statistic did stand out: "Real after-tax incomes are up by 9.6 percent since December 2000." . That statistic was through June. This week, the government updated it, and the figure through July is a little better, up 9.7 percent. That is a respectable number, and it helps to explain why consumer spending remained strong during the downturn. . The tax cuts that Bush pushed through Congress were a big reason for the gain. Adjusted for inflation, taxes paid in July were down 23 percent from December 2000, the last month of the Clinton administration. (All numbers are at seasonally adjusted annual rates.) . What else contributed to the increase? Private businesses are paying a lot more for employee benefits, principally the cost of health care. Those costs are up 22.6 percent, adjusted for inflation. And government spending on benefit programs, principally Social Security, Medicare and Medicaid, is up 18.7 percent. All that spending counts in disposable personal income, and it makes the overall number look better. But few of us feel better off when health insurance premiums go up. . In the area people think of when they hear about personal income, wage and salary payments, the picture is not as pretty. The entire increase there comes from the government payroll. Adjusted for inflation, private industry is paying almost exactly the same amount as in 2000. . Checking the numbers as far back as 1959, the earliest available, no previous administration has seen such a small gain - less than one-tenth of 1 percent - in private industry's real wage and salary payments over a similar period. The previous low was 1.4 percent, in 1988-1992, under the current president's father. Ranking third on that list of small gains, at 3.3 percent, was the Nixon-Ford administration from 1972 to 1976. In both 1976 and 1992, Republican incumbents were defeated. . The share of wage and salary income coming from the government can be seen as a measure of the size of government relative to the economy. It began to rise in the 1950s and peaked in the second quarter of 1975, under Gerald Ford, at 21.8 percent of total wage and salary income. It declined under Jimmy Carter and Ronald Reagan, rose a little under the first President Bush and then fell rapidly under Bill Clinton, hitting a low of 16 percent - the lowest level since Dwight Eisenhower was in the White House - in late 2000. . It has risen under the current administration. The latest quarterly figure showed 17.4 percent of all wage and salary payments came directly from the government. . Some of that is simple economic cycles. Government salary payments tend to rise less rapidly than private ones in good times and not to fall in bad ones. But it is also an indication that this administration has not managed to cut the size of government. . A bigger government and tax cuts are the major reasons that real personal incomes are up since 2000. The big question for the economy is whether the stimulus has been enough to produce a self-reinforcing recovery. More signs that the private economy has turned around will be needed before that can be deemed a sure thing.
The dept. of Homeland Security was added post 9/11, so I can see why. I really don't see the problem with adding that branch of government.
We spend more on the military than any other country in the world -- greater than the next ten countries *combined*. That's a staggering cost for "defense," especially since most of it is spent attacking, invading, overthrowing and occupying two countries that had virtually nothing to do with Sept. 11, 2001 -- the supposed justification for throwing money at the Pentagon.
The point of the article is that all the GDP growth was all in the public sector and the if Bush wasn't spending all this money, our GDP numbers would probably be flat or negative. I did some research on our GDP in dollars and found out that our GDP grew about 400 billion dollars in the first 2 quarters of this year. Considering our 400+ billion dollar deficit, it doesn't appear that bush's economic policies are very effective at stimulating the economy.
Your point about spending is a valid one, but the next paragraph is baffling. Afganastan had nothing to do with 9-11? Come on now....Iraq, I grant you, but Afganastan? DD
The Islamic Jihad terrorists were from Egypt, Saudi Arabia and Pakistan. They trained almost entirely in Egypt, Saudi Arabia and Pakistan. They were funded almost entirely by Egypt, Saudi Arabia and Pakistan. One or two of them were probably in Afghanistan at one point, and that was our rationale for invading a country that our government had already planned on attacking the year before. The Taliban was horrible, there's no doubt about that. But, compared to Egypt, Saudi Arabia and Pakistan, they had relatively nothing to do with Sept. 11, 2001.
Green, They were born there but they trained in Al-Queda camps in Afganastan, and were under the leadership of Osama Bin Laden, ALSO in Afganastan. Sorry, the world agreed with us on this one.....Iraq...well.... DD
The terrorists did some of their training in Afghanistan. That's undisputed. But the bulk of their training and funding simply did not come from Afghanistan. They were trained primarily in camps in Egypt, Saudi Arabia and Pakistan. Osama bin Laden was undergoing dialysis in Pakistan on Sept. 11, 2001. Afghanistan played a small role in the attacks, sure, but our government wasted valuable money and resources attacking, invading, overthrowing and occupying a country that played virtually no role in the attacks. I played basketball in Sugar Land once, but that doesn't mean Sugar Land is responsible for my mad basketball skills. Should the U.S. government have rebuked Afghanistan for their role in Sept. 11, 2001? You bet. But only after confronting the dictatorships and regimes in Egypt, Saudi Arabia and Pakistan that essentially funded and trained the terrorists. Our government didn't do that.
