George W. Bush presided over “lost economic decade”

New economic data suggests U.S. president-elect Barack Obama will be inheriting a far-more fragile economy than previously believed.  According to the Washington Post, George W. Bush presided over “the weakest eight-year span for the U.S. economy in decades”: job formation rose a “tepid” 2 per cent, GDP increased at the slowest pace since the Truman administration and incomes grew more slowly than in any presidency since the 1960s (other than that of Bush’s father). Many economists, including former Bush advisers, confirm that heady economic expansion of the Bush years was a chimera propelled by interrelated booms in the housing market, consumer spending and financial markets encouraged by the administration’s unsustainable “ownership society” mantra. Meanwhile, notes Douglas Holtz-Eakin, a former Bush White House staffer, there was a total absence of more sustainable saving and export-led growth. As for the capper, the administration set the tone for the credit crunch. Though it inherited a modest budget surplus when Bush took office in 2001, it ran a deficit — funding itself to a significant degree with borrowed money even as the economy was growing at a healthy pace. Mark Zandi, chief economist of Moody’s and informal adviser to McCain’s campaign who dubs the period “almost a lost economic decade” provides a dire summation: “It’s sad to say, but we really went nowhere for almost ten years.”

The Washington Post

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