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Talking Points--Economy, 4/17/89
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Talking Points--Economy, 4/17/89
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Originally Processed With FOIA(s):
FOIA Number:
S
FOIA
MARKER
This is not a textual record. This is used as an
administrative marker by the George Bush Presidential
Library Staff.
Record Group/Collection:
George H.W. Bush Presidential Records
Collection/Office of Origin:
Speechwriting, White House Office of
Series:
Speech File Draft Files
Subseries:
Chron File, 1989-1993
OA/ID Number:
13482
Folder ID Number:
13482-009
Folder Title:
Talking Points--Economy, 4/17/89
Stack:
Row:
Section:
Shelf:
Position:
G
25
6
2
2
Document No. 026472
WHITE HOUSE STAFFING MEMORANDUM
04/14/89
NOON Monday 04/17
DATE:
ACTION/CONCURRENCE/COMMENT DUE BY:
SUBJECT: TALKING POINTS ON THE ECONOMY
ACTION FYI
ACTION FYI
VICE PRESIDENT
MCCLURE NCC
SUNUNU
R
NEWMAN
SCOWCROFT
PORTER
DARMAN
STUDDERT
BATES
UNTERMEYER
WINSTON
BREEDEN
ROGERS
CARD
PINKERTON
CICCONI
DEMAREST
BOSKIN
FITZWATER
GRAY
HAGIN
REMARKS:
Please provide any comments/recommendations directly to
Chriss Winston (X2930, Rm. 122) by Noon on Monday 04/17,
with an info copy to my office. Thanks.
RESPONSE:
James W. Cicconi
Assistant to the President
and Deputy to the Chief of Staff
Ext. 2702
TALKING POINTS ON THE ECONOMY
8:
10
I. Sustained Long-Run Growth Is Our Central Economic Objective
Sustained growth is necessary to:
- Foster continued growth in real family income
- Provide job opportunities to a growing population.
The current expansion provides evidence of the benefits
of sustained growth.
- March marked the 76th month of the current
economic expansion.
- Nearly 20 million new jobs have been created
in that time. This far surpasses both the
total number of jobs created and the average
pace of job creation in the 76 months
following the start of previous expansions.
(See Chart 1.)
- Per capita personal income, after taxes and
inflation, has risen 17 percent in that time.
- The unemployment rate has fallen to 4.9
percent, the lowest since December, 1973.
Sustained growth can continue if sensible policies are
followed:
- Achieving further Federal deficit reduction by
controlling the growth of Federal spending will
increase the capital available to finance business and
housing.
- Promoting free and fair trade with other nations to
maximize economic progress both at home and abroad.
- Supporting monetary policy that predictably controls
inflation and provides a stable environment for making
productive business decisions.
- Promoting flexible and dynamic markets at home to
foster the kind of business environment that is
necessary to compete in rapidly changing world
markets.
The experience of the past two decades makes clear that
promoting long-run growth, rather than following short-
run, stop-go policies that are aimed at fine-tuning the
economy, is the best path to prosperity.
-2-
II. Record Setting Peacetime Employment is a Major Achievement
The unemployment rate for blacks hasn't been lower
since September 1974; this year for women it's lower
than at any time since January 1970; and for Hispanics
it's the lowest since separate record keeping began in
March 1973.
A higher percentage of the adult population is working
than at any other time in our history.
The U.S. has a lower unemployment rate than any of the
major industrial nations of Europe. (See Chart 2.)
During this decade, America has created more new jobs
than Japan and all of the nations of Europe combined.
III. Income Continues to Set New Records
Real income of the median family -- the family exactly
in the middle of the income distribution -- set a new
record in 1987 and continues to grow.
In 1987 there were 2.8 million fewer people in poverty
than in the first year of the expansion even though the
country added over 9 million people over that period.
(1987 is the last year for which data on poverty are
available.)
The typical American now has $1,700 more spending power,
after inflation, than in 1982. For a four-person family,
real median income has risen $3,700 from 1982 to 1987.
Low-income Americans have also benefitted. For
example, families in the lowest fifth of the income
distribution saw their average real income rise 11.0
percent between 1982 and 1987.
IV. Sensible Policies with a Long-Term Focus are the Key to
Continued Success.
Deficit reduction is needed so that more of America's
capital can go into business investment and provide for
further productivity growth.
- The President proposed a 4-year deficit reduction
plan on February 9 that will produce a balanced
budget by 1993.
- The Administration and the Congressional leadership
have agreed on the first step in this process -- a
budget plan for fiscal year 1990 which achieves the
Gramm-Rudman-Hollings deficit target.
-3-
- Over that period, the government will take in
an additional $300 billion in new revenue
without any new taxes. The $300 billion is
the product of our current tax system and
sustained economic growth.
- The President proposes limiting new spending increases
to $135 billion over the same period.
- The remaining $165 billion of new revenue is
used to eliminate the deficit.
American industry can compete successfully with the
rest of the world without government protection.
- During this expansion American industrial
output has grown 33 percent, faster than the
26 percent growth of our overall economy. We
are REindustrializing, not DEindustrializing.
- By contrast, the industrial output in Europe
has only grown 16 percent. Our industrial
output has grown more than twice as fast as
Europe's.
- Even Japan has seen only a 31 percent expansion
in industrial output. Our industries have
actually outperformed the Japanese during this
expansion. (See Chart 3.)
We must keep a lid on inflation and gradually move
toward price stability.
- We have had 7 straight years of consumer
price inflation under 5 percent. (See Chart
4.)
- The Administration supports the Federal
Reserve's efforts to restrain inflation while
maintaining real economic growth.
- The Administration and the Fed share the goal
of ultimately achieving price stability --
zero inflation.
- Monetary policies are already in place, and
have been for some time, which will work to
restrain and ultimately reduce our rate of
inflation.
- Stable and predictable monetary policies help
reduce the uncertainty in credit markets and,
therefore, the volatility and level of
interest rates.
Chart 1
Job Growth
From Start of Expansion
24.0%
22.0%
20.0%
18.0%
Current Expansion
16.0%
Total Percent Growth
14.0%
12.0%
10.0%
8.0%
6.0%
Average from Beginning of
4.0%
4 Previous Peacetime Expansions
2.0%
0.0%
-2.0%
0 4 8 12 16 20 24 28 32 36 40 44 48 52 56 60 64 68 72 76
CHART 2
UNEMPLOYMENT RATE: U.S. VS. EUROPE
PERCENT
12
10
8
6
4
2
0
1982
1985
1988
UNITED STATES
OECD EUROPE
CHART 3
INDUSTRIAL PRODUCTION
INDEX 1982=100
134
132
130
128
126
UNITED STATES
124
122
120
JAPAN
118
116
114
EUROPEAN COMMUNITY
112
110
108
106
104
102
100
1982
1983
1984
1985
1986
1987
1988
886T
1987
1986
1995
1984
1983
1982
T86T
086T
0
1
a
€
t
G
9
L
8
6
Percent change (Dec to Dec)
10
11
12
13
CONSUMER PRICE INDEX
CHART 4