Despite President Bush’s optimism about the American economy when he gave his final State of the Union address two nights ago, the sad truth is that the latest economic downturn is a reaffirmation of the amoral bankruptcy of the Bush Administration’s economic policies.
Even though the American economy was already slowing down before Bush took over as President in 2001, it is also true that despite his massive tax cuts and the trimming of interest rates by the Federal Reserve, the U.S. economy has not regained the robustness it experienced during the Clinton Administration in the 1990’s or the Reagan years from 1983-1987.
In the case of Ronald Reagan, Bush’s failure to achieve the same results as Reagan did when pursuing the same fiscal policies poses an interesting question: why?
There are several possible answers: the U.S. dollar was in far better shape during the Reagan years as opposed to the present Bush Administration. The national debt wasn’t as huge under the Reagan administration as it is now under George W. Bush (although the national debt rose dramatically during the Reagan administration). Reagan also benefited from a glut in oil exports which kept energy prices down whereas energy prices have spiked to obscene levels in this decade. But I think the most compelling answer as to why the economy thrived under Ronald Reagan when it hasn’t under George W. Bush is this: Ronald Reagan kept the peace during his administration and George W. Bush didn’t.
For all the outcries about how the Iraqi war has harmed America’s image abroad and our ability to influence world affairs, the war has also had the most deleterious effect on our domestic economy. For all the money we throw at defending ourselves from without, the irony is that America is collapsing from within as a result of our own belligerent exertions. Even if we achieve a military and political victory in Iraq (a long shot if there is one) we will still remain undone by the financial and human losses this war has inflicted on the American way of life.
It’s a price we will be forced to pay for a very long time.