Fed Raises Projected 2004 Unemployment Numbers
The Federal Reserve of Philadelphia released an updated economic outlook for the remainder of 2003 and into 2004 this morning, and the numbers aren’t pretty. Based on these numbers, and knowing that they factor in the effects of Bush’s tax cuts on the economy, I am of the opinion that George W. Bush will be beaten next year.
Some lowlights from the report:
The Federal Reserve Bank of Philadelphia said Tuesday economists have cut their growth forecasts for the current quarter and the whole of 2003.
The regional central bank said 35 private-sector economists from groups as diverse as JP Morgan Chase, the National Association of Home Builders and Georgia State University, expect the nation's gross domestic product to grow by 2.2 percent this year, down from their previous prediction of 2.5 percent made three months ago.
"Much of the downward revision for the year comes from a cut in the projection for growth in the second quarter, now expected to average 1.8 percent at an annual rate, down from 2.7 percent in the survey of three months ago," the Fed bank said in its quarterly Survey of Professional Forecasters.
I’m not an economics expert. But it seems to me that a downward revision in second quarter anticipated GDP growth from 2.7 to 1.8 percent, after the war and the tax cuts are factored in, tells me that the pros now see no post-war bounce or positive effect this year from the tax cuts. Worse yet:
The survey showed measured on an annual-average basis, unemployment is expected to be 5.9 percent in 2003, unchanged from the forecast of three months ago though the forecasters are associating slower growth this year with a higher forecast for unemployment next year.
The current estimate for 2004 stands at 5.7 percent, marking an upward revision from 5.5 percent previously.
Let me get this straight. The pros are now saying that after Bush’s tax cuts this year and his Iraq victory lap, not counting the effects of any future war into Iran or domestic terrorist attacks, the unemployment picture for this year will be 5.9 percent, and only drop to 5.7 percent next year? Is that what they are saying? Even with declining oil prices?
If this is the case, how can Bush, who has total control of the government, come to voters later this year and next year, blame Congress and demand support for another round of already-unsupported tax cuts, when his previous tax cuts have produced little growth and continuing job losses?
Put simply, how can a man in 2004 run for election on a 5.7 percent unemployment rate, over three million lost jobs, ballooning deficits, a fear-stoked populace, and no remedies except tax cuts for the wealthy?