PRESIDENT Bush's plummeting approval ratings are a bitter reminder that American voters hold him accountable for the troubled economy.
Yet another year in the history of economic policy shifts during presidential election years, 1992 could produce some dramatic changes given this year's focus on the economy. But past campaigns during tough economic times have resulted in often ill-fated attempts at quick fixes to promote recovery and growth.
Hindsighted economists, with their own experience as government advisers, are wary of just what the President Bush will offer as an economic growth package in his State of the Union address to Congress Jan. 28. They take a dim view of politicians, including Mr. Bush's challengers, who try to curry popular favor with fast changes that do more harm than good.
Barry Bosworth, a Brookings Institution senior economist who was director of the Council on Wage and Price Stability during the Carter administration, says the established history of "taking economic policy action in election years" has demonstrated "very little success."
National problems such as unemployment, inadequate health care, and shrinking disposable incomes are usually conditions that have existed far longer than the relatively short campaign period, Mr. Bosworth says. "It's not the six months before an election that matters, it's what's transpired over the past year or even decade."
The domestic economy, which many Americans say Bush has ignored, is the leading issue in this year's presidential race. Bush aides are scrambling to make the president appear to address voters' concerns without damaging the economy. A Democratic challenger who sought to best Bush as the leader who "cares" might offer tax cuts and more spending as a panacea, but such measures would only create more debt, say economists. Public perception shifts
"During my time in government, the real issue was whether we could balance the budget in a year, or whether the deficit might be as much as $1 billion. The public expected that we'd balance it," says Roy Ash, budget director under Presidents Richard Nixon and Gerald Ford.
Today's public perception has shifted, he says, and the ever-burgeoning federal deficit - approaching $350 billion this year - is very difficult for most Americans to fathom.
"Promises to cut taxes and provide real estate and investment incentives are symbols of caring," says Mr. Ash, "but they won't help the economy."
Taxes today are a smaller percentage of the nation's gross national product than they were from the 1940s through the 1970s, Ash says, and the spending side of the budget has ballooned since then. Federal and state revenue is needed to pay off the nation's $2.3 trillion debt.
Today's savvy candidates, consumed with their electability in the near term, will take their cues from history, says Edward Masters, president of the National Planning Association, founded in 1934 as a private-sector response to the need for an economic recovery plan during the depression years.
"The 1960 and 1980 election years [when the poor state of the economy was an important factor in opposition wins] are negative lessons for current candidates," Mr. Masters says. "In the 1960 election, Republicans suffered a loss because [President] Dwight Eisenhower didn't jiggle the economy for the election. And in 1980, incumbent Jimmy Carter waited much too long - and did too little, too late."
By 1972, incumbent Richard Nixon had done all he could to revive the slumped economy. "He threw money at the problem. Economically it was not a good move, but it was politically shrewd and Nixon won," Masters says.
Today, the federal government simply cannot afford to deviate from policies that keep a lid on the budget deficit and keep interest rates low. But watchful economists worry about political manipulation of the economy designed to please Americans who vote their pocketbooks.
"We need to buoy up the consumer [consumer spending is a crucial two-thirds of the nation's economic activity], and politicians figure they can't go wrong with middle-income tax cuts," says Ash.
There is a dangerous prospect that the tax relief could become a permanent and very costly provision in the tax code, Ash cautions. He warns that if "one-shot relief" fails to spur the economy, consumer confidence will be weakened further.
"Temporary tax changes are largely saved, not spent," says Bosworth. Cutting revenues and enlarging the federal deficit will push interest rates higher and "hold down recovery," he says.
Ash highlights consumers' indebtedness: "Expecting them to spend [their tax savings] is asking for artificial spending [running up credit-card balances or borrowing more money] anyway, because there is so much debt." Sluggishness seen
The administration's sluggishness in starting projects where financing exists plagues the Bush reelection team today. "If Bush had started much longer ago, investments in infrastructure may have made an impact on the economy this year," says Masters.
The Surface Transportation Act, a White House pledge that took years to make its way to Capitol Hill, where it was passed last month, promises $151 billion in new spending that will lead to 600,000 construction-related jobs in fiscal year 1992. But given the long lag between that bill and its payoff, "it's too late to help Bush in 1992," Masters says.
Economists agree that if the nation's welfare, rather than votes, were the priority, political platforms would address the country's long-term economic problems.