Economic Report of the President

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ECONOMIC REPORTOF THE PRESIDENTEconomic Report of the President | v
ECONOMIC REPORT OF THE PRESIDENTTo the Congress of the United States:The United States is enjoying a robust economic expansion because of thegood policies we have put in place and the strong efforts of America’s workersand entrepreneurs. Four years ago, our economy was sliding into recession.The bursting of the high-tech bubble, revelations of corporate scandals,and terrorist attacks hurt our economy, leading to falling incomes andrising unemployment.We acted by passing tax relief so American families could keep more oftheir own money. At the same time, we gave businesses incentives to investand create jobs. Last year, we gained over 2 million new jobs, and theeconomy’s production of goods and services rose by 4.4 percent. The unemploymentrate is now 5.2 percent, which is lower than the average of each ofthe past three decades and the lowest since the attacks of September 11,2001. Our pro-growth policies are taking us in the right direction.As I start my second term, we must take action to keep our economygrowing. I will not be satisfied until every American who wants to work canfind a job. I have laid out a comprehensive strategy to sustain growth, createjobs, and confront the challenges of a changing America.I am committed to restraining spending by eliminating governmentprograms that do not work and by making government provide importantservices more efficiently. I have pledged to cut the deficit in half by 2009,and we are on track to do so.The greatest fiscal challenges we face arise from the aging of our society.Because Americans are having fewer children and living longer, seniors arebecoming a larger proportion of the population. This change has importantimplications for the Social Security system, because the benefits paid toretirees come from taxes on today’s workers. In 1950, there were 16 workerspaying into Social Security for every person receiving benefits. Now there arejust over 3, and that number will fall to 2 by the time today’s young workersEconomic Report of the President | 3
Page 1 and 2: Economic Reportof the PresidentTran
Page 3: C O N T E N T SECONOMIC REPORT OF T
Page 7 and 8: the playing field is level for our
Page 9 and 10: LETTER OF TRANSMITTALCOUNCIL OF ECO
Page 11 and 12: Monetary Policy ...................
Page 13 and 14: Encouraging FDI ...................
Page 15 and 16: 3-4. The Equivalence of Sales Taxes
Page 17 and 18: Real GDP expanded by 3.7 percent du
Page 19 and 20: Options for Tax ReformChapter 3, Op
Page 21 and 22: and better Nation for it. A compreh
Page 23 and 24: Innovation and the Information Econ
Page 25 and 26: ecause they do not expect family me
Page 27 and 28: The Administration has pushed aggre
Page 29 and 30: C H A P T E R 1The Year in Review a
Page 31 and 32: Consumer SpendingConsumer spending
Page 33 and 34: easons for this correlation are dis
Page 35 and 36: 2003, a number of countries that to
Page 37 and 38: ProductivityRecent productivity gro
Page 39 and 40: The projected path of inflation as
Page 41 and 42: strengthen. The forecast is based o
Page 43 and 44: The growth rate of the economy over
Page 45 and 46: In sum, potential real GDP is proje
Page 47 and 48: C H A P T E R 2Expansions Past and
Page 49 and 50: The behavior of real GDP is similar
Page 51 and 52: of faltering may be attributable to
Page 53 and 54: most recent expansions have shown r
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middle of 2003. The more moderate r
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1.2 percent. Employment continued t
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SummaryModerate recessions are foll
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permanent cuts should permanently r
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and the Jobs and Growth Tax Relief
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Federal government revenues had bee
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Fiscal policy played an especially
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C H A P T E R 3Options for Tax Refo
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High Compliance CostsThe complexity
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a reasonable estimate is that a 10
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Excess BurdenBecause taxes distort
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Box 3-3 — continuedThe bottom 40
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more uniform or pure version of the
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of being collected all at once at t
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would have to differ from state tax
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owner claimed it was for business,
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The current set of saving incentive
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the current system. In addition, so
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C H A P T E R 4ImmigrationIn recent
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TABLE 4-1.— Foreign-Born Share of
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immigrants (also called illegal or
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largest group of immigrants was bor
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employment costs, including wage fl
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Chapter 4 | 103
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wages fall in response to immigrati
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immigrants from Latin America do re
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addition, as migrants leave the cou
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include siblings and adult children
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despite the tremendous growth in th
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The TWP would allow new foreign wor
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C H A P T E R 5Expanding Individual
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This phenomenon, known as the “tr
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producing more of that good. Simila
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In 2002, the President proposed “
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provide evidence of increased profi
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schools are four times as efficient
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low administrative costs, estimated
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Box 5-2: The Benefits of Land Title
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development plan designed by others
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C H A P T E R 6Innovation and theIn
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E-mail is the most common online ac
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Changed circumstances, such as new
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Illegal Acts on the InternetThe Int
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or develop new markets, which can l
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inflation factor for the price cap
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U.S. households connecting to local
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garbling their transmissions. To li
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from 51.3 percent in December 1999
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for their property rights. The Admi
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C H A P T E R 7The Global HIV/AIDS
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Chart 7-1 Estimated HIV Infection L
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There is no cure for HIV/AIDS, thou
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AIDS is more damaging to a househol
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and risk reduction have helped redu
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only one price, the drug companies
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Box 7-1 — continuedfocused on the
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Box 7-2 — continuedenhancing coor
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ConclusionThe United States and cou
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Good Two. In Ricardo’s simple mod
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The Impact of Trade on Labor Market
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The U.S. Advantage in Services Trad
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U.S. firms is associated with a cor
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anked the second-best country out o
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the Chinese government agreed to el
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Trade LiberalizationTariffs and oth
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ConclusionThe United States is the
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LETTER OF TRANSMITTALCOUNCIL OF ECO
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Report to the President on theActiv
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The Council continued its efforts t
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The Staff of the Council of Economi
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John List and Ted Gayer provided co
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Appendix BSTATISTICAL TABLES RELATI
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PageB-32. Gross saving and investme
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PageB-94. Relation of profits after
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NATIONAL INCOME OR EXPENDITURETABLE
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TABLE B-2.—Real gross domestic pr
Page 208 and 209:
TABLE B-3.—Quantity and price ind
Page 210 and 211:
TABLE B-5.—Contributions to perce
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TABLE B-6.—Chain-type quantity in
Page 214 and 215:
TABLE B-7.—Chain-type price index
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TABLE B-8.—Gross domestic product
Page 218 and 219:
TABLE B-10.—Gross value added by
Page 220 and 221:
TABLE B-12.—Gross domestic produc
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TABLE B-13.—Real gross domestic p
Page 224 and 225:
TABLE B-14.—Gross value added of
Page 226 and 227:
TABLE B-16.—Personal consumption
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TABLE B-18.—Private fixed investm
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TABLE B-20.—Government consumptio
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TABLE B-22.—Private inventories a
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TABLE B-24.—Foreign transactions
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TABLE B-26.—Relation of gross dom
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TABLE B-28.—National income by ty
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TABLE B-29.—Sources of personal i
Page 242 and 243:
TABLE B-30.—Disposition of person
Page 244 and 245:
Year or quarterTABLE B-32.—Gross
Page 246 and 247:
TABLE B-33.—Median money income (
Page 248 and 249:
TABLE B-35.—Civilian population a
Page 250 and 251:
TABLE B-36.—Civilian employment a
Page 252 and 253:
TABLE B-38.—Unemployment by demog
Page 254 and 255:
TABLE B-40.—Civilian labor force
Page 256 and 257:
TABLE B-42.—Civilian unemployment
Page 258 and 259:
TABLE B-44.—Unemployment by durat
Page 260 and 261:
TABLE B-46.—Employees on nonagric
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TABLE B-47.—Hours and earnings in
Page 264 and 265:
Year orquarterTABLE B-49.—Product
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PRODUCTION AND BUSINESS ACTIVITYTAB
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Year ormonthTABLE B-53.—Industria
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Year or monthTABLE B-55.—New cons
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TABLE B-57.—Manufacturing and tra
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TABLE B-59.—Manufacturers’ new
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Year ormonthTABLE B-61.—Consumer
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TABLE B-62.—Consumer price indexe
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TABLE B-64.—Changes in consumer p
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TABLE B-65.—Producer price indexe
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TABLE B-67.—Producer price indexe
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TABLE B-68.—Changes in producer p
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TABLE B-70.—Components of money s
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TABLE B-71.—Aggregate reserves of
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TABLE B-73.—Bond yields and inter
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TABLE B-74.—Credit market borrowi
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TABLE B-75.—Mortgage debt outstan
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TABLE B-77.—Consumer credit outst
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TABLE B-79.—Federal receipts, out
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TABLE B-81.—Federal receipts, out
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TABLE B-83.—Federal and State and
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TABLE B-85.—State and local gover
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End of yearor monthTABLE B-87.—U.
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End of monthTABLE B-89.—Estimated
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TABLE B-91.—Corporate profits by
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TABLE B-93.—Sales, profits, and s
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YearComposite(Dec. 31,2002=5,000) 3
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YearAGRICULTURETABLE B-97.—Farm i
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TABLE B-99.—Farm output and produ
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Year ormonthTABLE B-101.—Agricult
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INTERNATIONAL STATISTICSTABLE B-103
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TABLE B-104.—U.S. international t
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TABLE B-106.—U.S. international t
Page 330 and 331:
TABLE B-108.—Industrial productio
Page 332 and 333:
TABLE B-110.—Foreign exchange rat
Page 334:
TABLE B-112.—Growth rates in real
show all

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