Presidential candidates focus on jobs, economy

Democratic presidential candidate John Kerry accuses President George W. Bush of pandering to the rich, excessive borrowing and losing more jobs than any president since Herbert Hoover. Bush accuses Kerry of presenting an unfeasible plan for economic growth and lobbying to raise taxes.

With less than one week until Election Day, the economy remains a central issue for the campaigns and the public.

In a recent Daily Pennsylvanian election poll, 22 percent of students said that jobs and the economy were their greatest concern in the upcoming election -- a significantly larger percentage than for any other issue except foreign policy. Democrats have particularly attacked the Bush administration for the large budget deficit and what they call a declining job market that reduces the prospects of college graduates.

"Seniors at Penn will be the first graduating class to be graduating with fewer jobs available than when they went in," Kerry spokesman Mark Nevins said. "That's not good for anybody, but especially not for students."

Yet, since September 2003, there has been positive job growth. Some economists have noted that the market is displaying clear signs of reasonable, if not spectacular, recovery.

"If you look over the last year, we in business have created 1.8 million jobs," said Stuart Hoffman, chief economist for the PNC Financial Services Group, Inc. "That's OK, that's decent. To say the job market is really doing well [for] Penn graduates, other university graduates, ... we'd like to see 2.5 million" jobs created.

But times may not be so tough for college graduates. While acknowledging that unemployment rates are not as low as in the boom years of the 1990s, some economists say the recent mild recession was not too damaging to students.

"One of the most important economic trends since the 1970s is that college" graduates are performing well in the job market, Economics professor Jose-Victor Rios-Rull said.

"Companies are reaping the benefit of increased productivity," said Steven Wray, deputy director for the Pennsylvania Economy League. "They get the same level of work out of fewer people."

Republicans insist that Bush inherited a recession from his predecessor, placing the blame on former President Bill Clinton. Meanwhile, Democrats have labeled the overall job loss in the last four years as a clear sign of Bush's mismanagement.

Bush's response to the mild recession and net loss of jobs has been controversial -- he initiated two large tax cuts intended to stimulate the economy. Kerry has accused Bush of giving the largest breaks to the wealthiest people in the country, to the detriment of the middle class.

Though some question their beneficial impact, the cuts stretched to all income groups. Rios-Rull said there was no hard evidence that they were effective, but others disagree.

"I think they have stimulated growth," Hoffman said. "The recession was on. The tax cuts were well-defined, well-timed."

In fact, Kerry agrees with a tax-cutting policy, and says in his campaign economic plan that he will grant 98 percent of families tax cuts, particularly for education and health care.

Even though politicians take credit for economic upturn and deny liability for downturn, it is debatable how much responsibility any administration can assume for economic changes.

"There's a question as to how much policy can affect" the economy, Wray said. "There are a variety of incentives, packages that can be tried. ... The jury is still out on what can be done."

But economists agree that the tax cuts cannot continue indefinitely. Young people may have to shoulder the burden of the breaks and the deficit, either in the next few years or the next few decades.

"Over a very long period of time, the next 20 or 30 years, unfunded medical and Social Security liabilities are going to be a real challenge facing the economy, particularly for people in their 20s," Hoffman said.

He added that, while running a short-term deficit was acceptable, it was essential for the next administration to reduce it by half.

The future for the economy remains uncertain, despite the candidates' frequent speeches on the topic. "No matter what happens, this is going to be a very close election," Wray said. "If Kerry wins, he's not going to have full control of Congress. ... Changes will have to be bipartisan, less drastic."

Please note All comments are eligible for publication in The Daily Pennsylvanian.