Economic reality hit Americans hard over the weekend as newly released data showed a dramatic slowing of economic growth, a decline in consumer spending, and federal budget deficits reaching an all-time high. President Bush continued to talk up the economy stating, "We've turned the corner and we're not turning back," – surely comforting words for millions of Americans facing stagnating wages, rising costs, and mounting debt.
Millions of struggling Americans have been left behind in today's economy. New economic data released last week showed paltry 3 percent annual growth rate in the second quarter – down from the 5.4 percent average growth rate in the year ending in March – thus increasing concerns about long term job and wage growth.
Middle class consumers – fueled by rising household debt – cannot sustain economic growth. The primary culprit for slower growth was a sharp drop-off in consumer spending, which accounts for more than two-thirds of our nation's economic activity. The amount of economic activity driven by consumers in the second quarter grew by only 1 percent, the weakest since the recession and a sharp decline from the 4.1 percent clip in the first quarter of 2004. At the same time, job market growth remains slow, wages continue to decline, and household debt is mounting.
"Tax-and-spend conservatives" have created a major fiscal crisis that will threaten economic growth for years. The Office of Management and Budget estimated a $445 billion budget deficit for fiscal year 2004 – $70 billion more than in 2003 and over $100 billion more than originally estimated by the Bush administration. Projected deficits of $5 trillion over the next 10 years will almost certainly drag down economic growth, reduce job and wage opportunities, and force spending cuts in critical programs aimed at helping struggling Americans.
Center for American Progress
Millions of struggling Americans have been left behind in today's economy. New economic data released last week showed paltry 3 percent annual growth rate in the second quarter – down from the 5.4 percent average growth rate in the year ending in March – thus increasing concerns about long term job and wage growth.
Middle class consumers – fueled by rising household debt – cannot sustain economic growth. The primary culprit for slower growth was a sharp drop-off in consumer spending, which accounts for more than two-thirds of our nation's economic activity. The amount of economic activity driven by consumers in the second quarter grew by only 1 percent, the weakest since the recession and a sharp decline from the 4.1 percent clip in the first quarter of 2004. At the same time, job market growth remains slow, wages continue to decline, and household debt is mounting.
"Tax-and-spend conservatives" have created a major fiscal crisis that will threaten economic growth for years. The Office of Management and Budget estimated a $445 billion budget deficit for fiscal year 2004 – $70 billion more than in 2003 and over $100 billion more than originally estimated by the Bush administration. Projected deficits of $5 trillion over the next 10 years will almost certainly drag down economic growth, reduce job and wage opportunities, and force spending cuts in critical programs aimed at helping struggling Americans.
Center for American Progress
