It's the economy, silly

Via Instapundit we learn that Bush and Co. have been very efficient on the fiscal side of things.  We know that the economy is back up to pre-2000 standards, given that the stock market has surged and the Dow is at a new record level.

But one of those things that Bush-critics have railed about is that jobs hadn’t been keeping up with the economic surge.  Ignoring the history of the job market to follow market surges after they happen, not during.  So how are the jobs?

So instead of 5.8 million new jobs over the past three years, the U.S. economy has created 6.6 million. That's a lot more than a rounding error, more than the number of workers in the entire state of New Hampshire. What's going on here?

Our hypothesis has been that, due to the changing nature of the U.S. economy, the Labor Department's business establishment survey has been undercounting job creation from small businesses and self-employed entrepreneurs. That job growth has been better captured in Labor's companion household survey, which reported 271,000 new jobs in September after 250,000 new jobs in August, and a very healthy total of 2.54 million new jobs in the past year.

Most of the media has ignored all this and instead focused on the disappointing 51,000 "new jobs" number from the establishment survey for September. But even in that survey, the jobs number for August was revised upward by 62,000 and the U.S. jobs machine continues to roll out an average of about 150,000 additional hires each month. Even the loss of residential construction jobs in September, due to the housing market slowdown, was nearly matched by payroll gains in commercial construction.

Also, the unemployment rate has now fallen to 4.6%, or about as low as it was in the days just before 9/11.   Glenn Reynolds comments, “You'd think that all this good economic news would get more attention, but it seems that "It's the economy, stupid!" was a 1990s phenomenon.”

Which is true at least for my local paper, as I’ve seen nothing.

But also, did anyone know that Bush’s fiscal promise of cutting the budget deficit by half is coming true?

A huge point has been virtually if not totally ignored since the announcement on Friday that the reported federal deficit for the fiscal year that ended a week ago was $250 billion — The Bush Administration has done what it said it would do about the deficit three years ago, and has done it a full three years early, i.e., in half the time predicted.

This is because of the tax receipts that Washington has been getting primarily because of the resurgent marketplace, mainly jumpstarted by the Bush tax cuts earlier in his term.  Blummer points out that at the current rate of growth the deficit could be eliminated by the end of Bush’s term, despite the outrageous spending and the war effort.

However he lists several caveats that shouldn’t be ignored if we all want that to happen, namely 1. our congressmen need to learn how not to spend, as they could make this good thing a really bad thing pretty fast.  2. Bush’s tax cuts are due to end in 2010, and the market will treat that as a tax INCREASE and respond accordingly (i.e. the growth will slow down a lot).

Just for fun, click over to this site, which provides a graph of the federal budget in easy to read format.