Bush's Positive Pronouncements on the Economy Meet with Skepticism

On Monday, President Bush stated in a public address that Congress "cannot take economic vitality for granted...the most negative thing that Congress can do in the face of some economic activity is to raise taxes on the American people."

The Bush administration insists that in spite of energy costs and the housing market debacle, the American economy remains quite strong, which does echo the feelings of a fair number of economists.

However, some other economists are not so sure of this assessment.

With the credit market's bottom having fallen out in the second half of this year, the foundation stone of the modern economy--which is trust--has been shaken to its core, according to those who criticize the Bush stance.

About 40% of economists still believe that there is the likelihood of a recession in the first half of 2008.

However, most of these admit that economic growth has indeed been strong and steady and inflation, until very recently with the Fed's moves to lower interest rates, has been exceptionally low for a very extended period of time.

Corporate profits and job creation have been good, mortgage interest rates still remain low, and shareholders and investors are generally quite happy.

What's more, Americans seem to be showing signs that at least for now, they are reigning in the "consumption culture" that has predominated for the last 10 years, being more thoughtful in their purchasing choices and willingness to borrow or not, and the vast majority are not doing the double-takes on high gasoline prices that would have been thought only a couple of years ago to be capable of largely shutting down society as we know it.

However, economists are expressing concern over the fact that the widening rich-and-poor gap in the United States is being politicized, which could lead to distorted actions being taken on banking regulations or against the Federal Reserve's autonomy as well as taxation that would end up only harming the public and the economy.

Although things for those "on the bottom" are worse than they have been, at the same time more people than ever in the United States are attaining "affluent" status.

The poor are not really getting "poorer", but they are seeing more troubles because of rising prices in certain sectors.

However, a great many people that this journalist has talked to, while there are some who are indeed optimistic, tend to want to blame President Bush's "failed policies", as the Democrats (according to their critics) have been successful in getting into the national vocabulary, for their own economic woes if they have any; and many take the view that Bush's Administration has no sound plans for anything at all concerning the economy, whether it be the Dollar's decline or credit market solutions, and is using such things as the issue of illegal immigration as a distraction from real domestic issues.

Other people express outrage over what they see as a bailout of sub-prime lenders and a tax protection of hedge-fund managers.

The Democrats have expressed virtual unanimity about the need to sharply raise taxes on hedge funds.