‘I'm a Supply-Sider'

President Bush had a bit of fun at his press conference with the fact that he wasn't a top student. He said he got a B in Economics 101, adding, after one of his famous pauses, "I got an A, however, in keeping taxes low. . . ." And when the laughter died down and the questions continued he showed over and over again that he has a profound understanding of the economy and of his own policies – and of where he fits in to classical economics.

The president had been asked whether his feelings were hurt by the criticism he received from Alan Greenspan or some of the figures who have left his administration. "My feelings are not hurt," the president replied. He said he disagreed with Mr. Greenspan when it comes to handling the fiscal issues. "The deficit, as a percent of GDP, is low," the president said. "It's lower than the 30-year average."

This is the point we have been making for some months now in these columns, including in our second "Incredible Shrinking Deficit" editorial, issued on August 24, which sketched the drop in the budget deficits as the Bush tax cuts kicked in — $413 billion in 2004, dropping to $318 billion in 2005, dropping to $248 billion in 2006, and dropping to a projected $158 billion in 2007. Those numbers are from not the White House but the Congressional Budget Office, which reckons that the deficit as a percentage of GDP will plunge this year to a scant 1.2%, a third of what it was in 2004.

Mr. Bush pointed out that the administration has submitted a plan to balance the budget by 2012 and has dealt with a recession, a terrorist attack, and corporate scandals. "We did it by cutting taxes. The tax cuts worked. The economy recovered. People are working. Interest rates are low." And then he said, in what will become a famous sentence, "I am a supply-sider." He said he believed that "supply-side economics, when properly instituted, enables us to achieve certain objectives."

The president defined those objectives as "people finding work" and "hope in the economy" and "additional tax revenues." He pointed out that we are fighting a war at the same time we're headed toward a balanced budget. The liberal elites like to laugh at Mr. Bush and say that he's going to be the loser in the history books. But carrying on a war, cutting taxes, and moving toward a balanced budget at the same time is one of the remarkable hat-tricks in all of American history.