RENO - A top official with the United States Chamber of Commerce said Friday that nearly all aspects of the nation's economy are improving, and other matters that may not be as savory, such as the budget deficit, will be dealt with in time.
Martin Regalia, the vice president for economic and tax policy and chief economist of the United States Chamber of Commerce, said to an audience of about 700 at the Directions 2005 economic forecasting event that consumption and personal wealth is up, and that is mainly because of an aggressive fiscal policy initiated by this administration.
"Some economists said the tax cuts wouldn't work, that people wouldn't spend them, but the opposite has proven true," Regalia said.
The 13th annual Directions 2005 is co-sponsored by the Reno-Sparks Chamber of Commerce and the Economic Development Authority of Western Nevada. The event is meant to make local business leaders aware of national and regional economic forces that affect Northern Nevada's economic base.
Regalia said that before the Bush administration's tax cuts, consumption was floundering. Now people are spending, especially in the housing market, which generated $4 trillion in wealth this past year. He also praised corporate America's commitment to on-shore investment.
"Ninety-nine percent of corporate America is honest and hardworking," Regalia said. "Corporate America is not the big boogey man ... they are working hard and not shipping jobs overseas."
He said the U.S. trade deficit, for real net exports of goods and services, is one graph that isn't as positive, but he put some of the responsibility for that on the Clinton's administration's "strong dollar policies that don't necessarily create a strong economy" and foreign countries depressing the U.S. dollar and using that to prop up their own currencies.
Regalia cited rising oil prices as another problem in the U.S. economy. According to the U.S. Chamber of Commerce data, nominal oil prices are up nearly $50 a barrel. To wean the U.S. from dependence on foreign oil sources, he said Congress should allow drilling in Alaska's Arctic National Wildlife Refuge. Canada is the top provider of oil to the U.S. It imported more than 700 million barrels of oil in 2004. Saudi Arabia was second with about 600 million barrels. Iraq was low on the list with less than 200 million barrels in 2004, according to the chamber of commerce.
With a 2004 budget deficit of more than $400 billion, Regalia said projections are that it will continually improve until reaching a surplus by about 2012. He cited the wars on terrorism and Iraq and the tax cuts as the reasons for the record levels of deficit.
"The deficit, while a problem for tomorrow, is not a problem for today," he said.
n Contact reporter Becky Bosshart at bbosshart@nevadaappeal.com or 881-1212.
