Reports Document Seven Years of Bush’s Failed Economic Policies

Frank Llewellyn
DSA National Director

The Census Bureau released its annual report on poverty in America on Tuesday .  While on the surface the data indicate a slight improvement in wages and the number of Americans with health insurance coverage, the reality is very different.

Adjusted for inflation, the median income for all households rose by 1.3 percent to $50,233 last year.  However, the news was not as good for working households headed by those less than age 65, whose increase was insignificant. Compared to the year 2000 figures, this group saw a reduction of income of $2,176. In 2007 the official poverty rate increased slightly, from 12.3 percent to 12.5 percent.

According to an Economic Policy Institute (EPI) report by Jared Bernstein, the period 2000-2007 shows the lowest increase in median income (it’s actually a negative $324.00) of any of the four cycles of economic growth over the last four decades. This report also documents the significant increase in economic inequality over the course of Bush’s administration. The Census Bureau reports Americans whose household income was in the lowest 20 percent saw their incomes drop 6 percent since 2000 while those in the top 20 percent saw a 1.6 percent gain. Bernstein also argues that the Census reports on higher income Americans hide the true magnitude of the inequality, given that capital gains are excluded and much of the other data is capped, so we can’t see the true gains of the top 10 percent, 5 percent or even 1 percent of earners.

By contrast, Bernstein cites an analysis of income tax returns that include capital gains data and more exact income data. It documents a 50 percent increase in income since 2001 for the top 1 percent.

The Census report also provides some good news: the number of Americans without health insurance dropped by 1.2 million to 45.7 million. However, it’s a mixed blessing; the number of uninsured Americans is still more than 7 million higher than in 2000. Moreover, the number of Americans with employment-based healthcare (health coverage as a result of a job) declined again in 2007. An EPI study prepared by Elise Gould reports that the share of employment-based heath insurance coverage dropped 5 percent since 2000.

Looking forward, we can only expect a sharp downturn in these economic trends. The ongoing mortgage-induced economic slowdown will further depress household income, especially for the middle and lower groups.  Job losses were relatively modest in 2007 but are now accelerating, which will put even more downward pressure on incomes and inevitably lead to an increase in the number of uninsured.

The EPI is an important source of accurate information on the economy; I keep their Website on my list of favorites and check it regularly. The full text of the report on income and poverty, which documents increasing inequality, is available by clicking here; the text of the report on health insurance coverage is available by clicking here.

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