Bush’s 5 Smartest and Dumbest Economic Moves

No one can say President Bush hasn't had a full economic plate of trouble in front of him—imploding asset bubbles (stocks and housing), corporate scandal tax, an energy crisis, a credit crisis, and an (almost) recession. With his time as president nearing a close, let's take a look at the president's best and worst economic moves.

First, the Smartest Moves:

1) Getting the 2003 tax cuts passed. The reduction in capital-gains rates (and the acceleration of the 2001 income tax rate reductions) were growthy and well-timed, helping give the economy the momentum that, so far, has prevented a housing/credit/oil-related recession.

2) Lifting the executive ban on offshore oil drilling. This helped changed the momentum of the energy debate in this country and almost certainly contributed mightily to the recent 20 percent drop in oil prices, saving America about $600 million a day.

3) Pushing Social Security reform. Although this 2005 effort did not result in any action, it cemented in the public mind that Social Security is broken, so much so that even the likely Democratic nominee is calling for it to be fixed. (That's been a political no-go zone for Dems for a generation.)

4) Fighting the war on terrorism. Security is a foundation for economic growth, and there have been no terrorist attacks in the United States since 9/11. Let's roll.

5) Picking Hank Paulson. The former Wall Street investment banker has reinvigorated the Treasury Department and been a key player in keeping the credit crisis from spiraling out of control and in expanding our economic dialogue with China.

Now the Dumbest Moves:

1) Getting the 2001 tax cuts passed. They were more about social policy (helping families, for instance) than about boosting near-term economic growth. The result was a sluggish expansion and higher-than-necessary budget deficits. Good idea, bad timing.

2) Failing to reform entitlements. Not only was there no Social Security or healthcare reform, but Bush put in a brand-new entitlement, Medicare Part D, that added more to our long-term liabilities than Social Security does.

3) Passing Medicare Part D. This was so fiscally foolish it deserves a second mention. Really. To elaborate, it added $8.4 trillion in liabilities, vs. $6.8 trillion for Social Security.

4) Boosting big, expensive government. Discretionary spending was $762 billion in 2000, up 45 percent in real terms, according to the Heritage Foundation. Next year's budget deficit will be roughly $500 billion. Tack on stimulus packages and housing bailouts and Fannie/Freddie bailouts, and you certainly get a picture of an administration that failed to shrink the size and scope of government.

5) Not supporting the U.S. dollar. The falling greenback has helped send commodity prices soaring and sapped the country's economic and global prestige.