Editorial: Economy skating on thin ice

Tuesday, Dec. 6, 2005 | 9:36 a.m.

Unless there are near-miraculous turnarounds, the two biggest liabilities for the Republican Party in next year's midterm elections will be the war in Iraq and the economy. Neither are going well and voters could hold Republicans, who control the White House and both houses of Congress, as the ones most responsible.

The Washington Post reported last month that a Democratic takeover of either the House or Senate is not out of the question after the votes are counted 11 months from now. A loss of either one (losing both would be a long shot but it is possible) would signify widespread popular dissatisfaction with President Bush's presidency. With the stakes that high, Bush is taking the offensive.

Last week the president began a series of speeches on Iraq, with the goal being to regain some measure of support for the war going into the election season. Also last week Bush began touting the economy. This will be a theme heard often from the White House over the next several months.

As with Iraq, however, most polls are showing that a large majority of Americans believe the administration has mishandled the economy. And as with Iraq, Bush's offensive on this issue dwells on short-term gains and avoids the long-term outlook.

Bush's tax cuts have helped create a $319 billion deficit, which will rise precipitously if they are extended. Federal Reserve Chairman Alan Greenspan is among the analysts who say that tax cuts cannot coincide with the rate of spending under the Bush administration without grave long-term consequences for the economy.

Other analysts point to the country's large and ongoing worker layoffs, steady increases in consumer prices, steady decreases in hourly wages (when adjusted for inflation), the 37 million Americans living in poverty, the rising cost of health care, the slumping American auto industry and the increasing costs of energy and housing.

When Bush talks of economic growth over the past two years and the 215,000 new jobs created last month, he is looking ahead to November's election. When parents look at the budget deficit and the national debt ($8 trillion now), they are looking ahead to their children's future with great concern.