On April 7, an editorial printed in The Minnesota Daily from The Observer at the University of Notre Dame claimed that the economic growth of 2003 and 2004 has proven that President George W. Bush’s policies of tax cuts were correct. But the economic growth experienced in the second half of 2003 has just proven the president’s policies have provided nothing but an economic sugar rush.

Multiple rounds of tax cuts coupled with extremely low interest rates (enabling families to refinance their mortgages) poured enormous amounts of disposable income into consumers’ hands; it is only reasonable to assume that a short-term, consumer-driven stimulus would ensue.

Like most sugar rushes, things cool down after awhile. The Observer said the gross domestic product grew at 7.4 percent in the third quarter. What it does not mention is that fourth-quarter growth was nearly half that. Consumer demand dropped from 6.9 percent in the third quarter to 2.6 percent in the fourth quarter. More importantly, this short-term stimulus is jeopardizing the long-term welfare of the U.S. economy.

In 2000, when Bush was campaigning, he would say that the taxes were the “people’s money,” but what was never mentioned is that the government debt was also the “people’s debt.” One cannot keep cutting taxes and running deficits for short-term gains and ignore the long-term problems such as the national debt.

Bush has effectively reversed from the Clinton years during which great strides were made to pay down the national debt. The past few years of budget deficits have raised the national debt to more than $7.1 trillion and each citizen’s share of the debt is now $24,288.

What is worse is that the tax cuts are favoring large corporations to the point where the share of tax revenue that comes from corporate incomes, about 10 percent, is at its lowest level ever. So despite the fact that large corporations are outsourcing American jobs, they are also receiving tax breaks – all the while government programs that increase education and training levels in the United States are going under-funded because of revenue loss. These programs are badly needed to help unemployed workers cope with job loss.

The result is that U.S. workers have not been able to respond to change and are staying unemployed for longer than during previous recoveries. In fact, the percentage of the unemployed who have been out of work for more than six months is now at 22.1 percent, the highest in 20 years.

To be included in the unemployment figure, one needs to be out of work and actively searching for a job. Unfortunately, after such a long time out of work, many have stopped looking for jobs, which is keeping the unemployment figure low. If those who have given up looking for jobs were included in the figure, it would be much higher. The Observer noted that in March, 308,000 jobs were added. But what it did not note was that the unemployment rate actually increased to 5.9 percent because more of the unemployed are looking for jobs.

The Observer got one thing right: Numbers do not lie. What the numbers say is that Bush is thinking too short-term. As those who graduate join the work force, they are more worried not about how much of their income is going to be taxed, but if they will earn an income at all. Graduates are thinking about what kinds of careers they want to start, what kinds of skills they need, where to live, where to raise a family. They are thinking long-term. So should Bush.

Justin Freiberg is an economics senior. He welcomes comments at [email protected]