The hose from the P/S reservoir that connects to the P/S pump in a NB, and runs along the front close to the water radiator looks that is in a bad shape, so if there were a small hole in that hose, would you say that would be the cause that P/S is not working properly now?.Unless there's a leak in the line, bubbles should work themselves out. If a big bubble get into the lines it'll be stirred up by the pump and turn into lots of small bubbles. I'd think that if you didn't have this problem before it's just a lot of air that is causing the PS to not work.
Fixed it, it was actually the P/S hose, that sucker was $85.00, expensive hose, thanks chitty and the rest for all your help.IMO, if the hose was leaking on the high pressure hose then you should see wetness. If there's a leak on the low pressure return hose than you should still see wetness. Check the unions. If the PS pump was doing this before then I could see the problem being the steering rack or a leak at the union. I would think that the NB would be very similar to a Jetta.