President Bush is urging Americans to be optimistic about the recession, promising that even the U.S. effort in the Persian Gulf war ultimately will help the world economy.
The recession, which economists say began in late 1990, will be "mild and brief," and Americans should have "a healthy sense of confidence" about the economy, Bush told a dinner of the Economic Club of New York on Wednesday night."I predict that in a couple of quarters we'll come out of this and we'll have a robust economy," he said.
But the president didn't seem to generate much enthusiasm in the audience of some 2,000 business executives when he vowed that this year's $318 billion federal budget deficit will be reduced to zero by 1995.
A smattering of applause was overtaken by snickers as Bush declared:
"True, the deficit is high - unacceptably high. The S&L (savings and loan bailout) costs, the war and the economic decline haven't helped a bit. But thanks to the budgetary reforms begun last fall, the deficit will be virtually eliminated by 1995."
Bush's evening trip to New York came a day after his administration unveiled a proposal to revamp the nation's banking system and two days after he released his deficit-heavy, $1.45 trillion budget for fiscal 1992.
Answering a question from the audience about his prediction for the future of the economy, the president said there has been "too much pessimism."
"I can understand why. If I were an autoworker laid off, I guess I'd have every reason in the world to have doubts," he said.
But Bush said the U.S. activity in the gulf war will eventually provide for a brighter future.
"I believe that by standing up to aggression in the gulf we are guaranteeing the future security and stability of that area that is so vital to global economic prosperity," he said.