Brad DeLong's Semi-Daily Journal (2004)

Why Oh Why Are We Ruled by These Liars? ('Ask' the White House Edition)

I sent in a question to Treasury Secretary John Snow for his appearance on "Ask the White House":

In yesterday morning's _Wall Street Journal_, Harvard economist Martin Feldstein said that the Bush administration was committed to Social Security reform along the lines of the Feldstein-Samwick-Lindsey plan that would attempt to (a) close the Social Security financing gap without (b) raising Social Security taxes or (c) cutting Social Security benefits, while in addition giving Social Security contributors control over their invested funds by providing them with (d) private accounts.

George W. Bush's first Treasury Secretary, Paul O'Neill, and his Social Security team headed by Kent Smetters were opposed to this plan, as likely to (a) shift much too much of the risk of a poorly-performing stock market off of the general public and onto specific cohorts of retirees, and (b) go wrong and further destabilize the long-run financing of the American government.

Does the current Treasury Department line up with O'Neill or with Feldstein on this?

These are the questions that John Snow decided to answer, instead of answering mine:

This has probably been asked, but where do you really see the economy going for the end of the year and into next? Is raising the interest rates the best thing?

Mr. Bush has brought us a record federal deficit and a record trade deficit. The OMB has stated that one third of the tax cuts went to the richest 1 of Americans. Mr. Bush will be the first president since Hoover to have presided over the loss of a million jobs, net. The stock market is low and the oil prices are also at record highs. What can you point to that is positive about the Bush economic policy and isn't Mr. Bush in the same spot his father was in?

Secretary Snow, The President's tax cuts have been described by many Democrats as simply tax cuts for the rich and that middle class people didn't really get a tax cut at all? Don't the rich receive more of a tax cut because they pay more taxes or is that not true? Thanks.

Thank you, Mr. John Snow, for taking my question. Will the rising gas prices cause people to contribute less to the growing economy? Thanks again and God Bless.

What is treasury doing to address the security concerns in the financial services sector? Also, i heard they may close 15th street by the Treasury Building - is that true? Keep up the good work with the Economy

I know the economy is rapidly improving nationwide, but it takes longer for us to feel the effects in the Midwest. Truthfully, when do you think we'll begin to see real signs of progress? We're still losing jobs to outsourcing like crazy here.

Has the unemployment rate increased or decreased since September 11, 2001? There's a lot of contraversy about this with the upcoming election and everything. Thanks for taking my question America

I am trying to start a business with no in- pocket finances i would like to know is there free money lingering in the government. If so how can i get it

The US currency is going through too many changes. First there was the bigger pictures on bills, and now multi-colored bills. It has been a problem getting some of these accepted in machines. Especially in Atlantic City. Do you test the new designs on such machines? I am not asking you to go to Atlantic City and spend a couple of thousands on this research

The Bush Administration's 2001 and 2003 tax reforms helped return more money to the average American, but there have been recent discussions of changing our tax system from its current unfair progressive system to a flat income tax rate or a national sales tax. Mr. Secretary, which of these tax reform plans being discussed today would allow Americans to keep more of what they earn?

Thank you Secretary Snow for participating in this forum and taking the time to respond to my questionstatement. I firmly believe that government has taken on roles and responsibilities that properly belongs to the individual and private sector. When President George H.W. Bush addressed the crowd that had assembled for the Labor Day Mackinac Bridge Walk in 1992, a heckler shouted, "What are you going to do to get me a job?" I am not aware if the President had heard his comment, however, I responded, "What are you doing?" Secretary Snow, I was concerned by the contents of the first paragraph of your biography: "...As Secretary of the Treasury, Snow works closely with President Bush to strengthen economic growth and create jobs." Secretary Snow, how do you believe that the government creates jobs?

Is the outlook for employment in the workforce good for people that are just graduating college? I would like a government job, and I was wondering what kind of experiance you need, if the economy can support more college graduates, etc. Thank youLaura

Why isn't the White House communicating why the Household Jobs Survey is a better indicator of the jobs situation in America than the Payroll Survey?

Thank you very much for taking the time to answer our questions, Mr. Snow. What would be the impact of the budget deficits on the US economy, and what are the mesures that this administration is doing to reduce the negative impact resulting from this deficit? And why is the Sercret Service a part of the departement of the treasury?

Of course, the worst of the Q-and-As is:

Why isn't the White House communicating why the Household Jobs Survey is a better indicator of the jobs situation in America than the Payroll Survey?

John Snow That's an interesting question, JD, and it's really one for the statisticians to work out. The Bureau of Labor Statistics (BLS) at the U.S. Department of Labor conducts both surveys, and there are merits to both. My guess is that the truth about real job creation lies somewhere between the two surveys. I can tell you that I see very strong evidence of job creation and growth as I travel the country and meet with business owners. Small firms in particular are taking advantage of the President's tax relief by purchasing new equipment, growing their companies and hiring new employees.

We do recall what Alan Greenspan said on this issue, don't we?

'I wish I could say the household survey were the more accurate,' Alan Greenspan, the Fed chairman, said in congressional testimony on Feb. 11. 'Everything we've looked at suggests that it's the payroll data which are the series which you have to follow.'... The Fed's conclusion was that the household survey's results had been inflated by overestimates of population growth.... If the population estimate is too high, the estimated number of jobs will also be too high. The bureau bases its population estimate on the 2000 census, but it then updates that estimate yearly with data on births, deaths and immigration. But immigration numbers are largely guesswork, because so much immigration is illegal. Fed officials suspect the immigration estimate is inflated because it fails to reflect tighter immigration controls since Sept. 11, 2001, as well as declines caused by the economic slowdown.