Economic Growth Surges To 4.8%
By Fred Barbash and Bill Brubaker
The nation’s economy regained momentum in the first quarter of the year as it recovered from the hurricanes of 2005, the Commerce Department reported yesterday, growing at a rate of 4.8 percent, compared with 1.7 percent in the previous quarter.
It was the hottest annualized pace for the gross domestic product in 2 1/2 years, with robust spending by consumers, business and government all doing their part.
“This rapid growth is another sign that our economy is on the fast track,” President Bush said.But the Commerce Department report was no surprise to economists, who expected a bounce-back from the slowdown following the hurricanes in the Gulf of Mexico region, including Hurricane Katrina. The rate announced yesterday was more in line with the pre-hurricane quarterly pace.
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While Bush trumpeted the Commerce Department results, he also said: “This good news cannot be taken for granted. With gas prices on the minds of Americans, we need to keep our foot on the pedal of this strong economy.”
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“The surest way to put the brakes on our economic growth would be to raise taxes or spend too much of the people’s money here in Washington,” Bush said. “That’s why I’m going to continue to work with Congress to make the tax relief that helped spur this economic growth permanent . . . [and] to make this country less dependent on foreign sources of oil.”
As a result of the Bush tax cuts and federal spending to compensate for the damage from Hurricane Katrina and the wars in the Middle East, the economy is rolling along at a respectable 4.8%, which is definately far better than any country in the European Union. However good the economy is at this point in time, the Congress and the president would be wise to work toward long term economic growth.
Long term economic strategies include making many provisions of the Bush tax cuts that are set to expire permanent and cutting federal spending. Social Security must be reformed into a system of taxpayer ownership, allowing Americans to invest a portion of Social Security into the stock market. There must be more focus on cutting business regulation and red tape, allowing citizens to easily start businesses or invest back into their own. Finally, Congress must work with the president to reduce our dependence on foreign oil by providing legislation to build new refinaries and allow more oil exploration and drilling (especially in ANWR) and secure our borders to reduce illegal immigration.
