Fire can be deadly. If anything, the California wildfires haveshown how fast-moving flames can engulf huge tracts of land.
Fire also has benefits: It stimulates regeneration, and thoseimpacts are being seen the country over from another type ofblaze.
This past week news of a massive economic fire stopped thepresses. The Commerce Department reported that economic growth rose7.2 percent over the past three months. This rise is the largest in19 years and signals the revitalization of an engine that had beenhiccupping after Sept. 11, 2001.
Other good signs have poured in. Reports show that unemploymentclaims are dropping, consumer confidence is up, manufacturing isgrowing and businesses are placing orders for big-ticket items andrestocking inventories.
For anyone puzzled as to why this happened, you don't need tolook far. The Christian Science Monitor reported that "consumershave gone on a spending spree."
A spree indicates that those consumers had cash to burn. That'sbecause "many Americans received child tax credits and saw theirincome tax withholding rates fall."
So, it was those nasty tax cuts. Proof rolls in once again thattax cuts trigger economic growth. Bush's cuts now join those ofCoolidge, Kennedy and Reagan in history as economic adrenalineboosts.
This recent news springs loose a couple of interesting points.The first of those is that this good news is terrible news forDemocrat presidential contenders. One of their two major areas ofattack on Bush is now gone as economists are projecting a growthrate of 4 percent over the next year.
The nine contenders can't rant that Bush is the cause of theworst economy in decades, which was a lie anyway (Anybody rememberCarter?). They also can't get away with their class-warfare drivelthat might have worked in downtimes since every income level isbenefiting.
Still, despite this good news, the presidential wanna-bes areshowing no signs of backing off from their pledges to kill the taxcuts. They're apparently willing to die on that hill.
One of the strong indicators in this recovery has been businessinvestment. The tax cuts included a dividend tax rate reduction,and corporate earnings for this year are projected at 15 percent.With more money, businesses are starting to expand.
For graduating seniors, this is outstanding news. The market isprimed for a new influx of talent, and companies now have the moneyto hire and invest in employee training. The tax cuts' effects aregiving those seeking employment a significant advantage over lastyear's graduates since companies are now finding the need to staffup.
As companies hire, this will further strengthen the economy byincreasing the consumer's spending power since more people willhave income.
It's also good news for juniors and underclassmen sinceeconomists do not view this recovery as temporary. Sung Won Sohnfrom Wells Fargo notes that the last time we saw a similar growthrate was after Reagan's tax cut, and that sparked "almost a decadeof prosperity."
This is one blaze we don't want to put out. We should be fanningthe flames of this new economic blaze. If the tax cut opponentssucceed in revoking them, we could all get burned.
Write to Jeff at mannedarena@yahoo.com
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