Friday, October 17, 2003
Copyright © Las Vegas Review-Journal

EDITORIAL: Turning the corner

Bad news for Democrats ... the economy's on the rebound

A robust, 12.2 percent growth in retail sales over the three-month period that ended Sept. 30 suggests that the national economy is poised for a major rebound. A number of private economists believe an annual growth rate of 7 percent or higher is possible for the third quarter -- more than double the pace we experienced earlier this year. Ten of the nation's 12 Federal Reserve districts reported a pick-up in growth, with increased hiring by temporary employment services -- a reliable predictor of job creation -- also included in the good news.

Why the unexpected turn of events? Independent analysts credit the latest round of tax cuts pushed by the Bush administration, which for the most part accelerated reductions in marginal tax rates that would otherwise have taken effect years down the road. Consumers have more money and are spending it; businesses are investing in new employees, buildings and equipment; investors are returning to the markets.

The federal budget deficit for the current fiscal year will be smaller than expected as well, as the Congressional Budget Office projects $374 billion in red ink, down from the $401 billion anticipated in the summer. While the CBO predicts the deficit will increase next year, it's expected to fall every succeeding year, until budget surpluses return near the end of this decade.

Such surprisingly favorable news may not be welcomed by Democratic presidential contenders -- or the national party. It may be time for them to head back to the drawing board. The candidates who hope to unseat President Bush have offered little in the way of domestic policy alternatives. Instead, they've pinned their hopes on the suffering of their fellow Americans. The Democrats' message can be summarized as: "The economy is lousy"; and "the Bush tax cuts are to blame."

As it becomes apparent that neither assertion is true -- if the economy has turned the corner because the tax cuts stimulated growth -- then why should voters choose another president, or replace the Republican leadership in Congress ... especially when the Democratic alternative would lead to a bloated bureaucracy and economic malaise?

We'd welcome a Democratic challenger who would expand economic liberty and individual initiative. The nation would benefit if President Bush's ultimate opponent pledged to eliminate corporate welfare in the forms of farm subsidies and tariffs; support genuine, free-market reforms in entitlement programs such as Social Security, Medicare and Medicaid; and advocate fiscal restraint by cutting spending and simplifying taxes.

Sadly, such sensible suggestions are anathema to the special interests that rule the Democratic Party, which is why a second Bush term seems likely.