International Information Programs
Office of Research Issue Focus Foreign Media Reaction

January 10, 2003

January 10, 2003




**  Conservative outlets praise structural reforms and tax cuts in the Bush plan, while leftist outlets claim only the rich will benefit.

**  Many see little short-term stimulus and worry about U.S. budget deficits.

**  Observers link the plan's economic objectives to Bush's reelection plans and determination not to repeat "his father's mistakes."



'An ambitious plan to boost the economy'--  Rightist and financial dailies hailed Bush's "ambitious and necessary" economic package.  Germany's Frankfurter Allgemeine termed cutting taxes on stock dividends "long overdue" while Britain's Financial Times commented "ending double taxation is to be applauded."  The Australian Financial Review said the plan was "on the money" while a Hong Kong paper added the plan should "benefit the global economy."  Some liberal outlets found merit in the plan, too: Montreal's French-language Le Devoir held that it "will certainly engender positive results by inciting Americans to invest" while London's liberal Guardian, usually reliably anti-Bush, called the package "a courageous adventure in Keynesian supply-side a time of great economic uncertainty."


Critics focus on 'social inequality' of tax cuts--  The Guardian went on to complain, as did many liberal and leftist papers, that "most of the supply is being piped directly to the rich."  A leftist Italian daily dubbed the plan "pure Reaganism," while others doubted it would be "economically effective" or "socially fair."  Spain's independent El Mundo described the proposal as "a big benefit for the most rich...disguised as an economic stimulus," while a Belgian writer complained that "the poor will drink their cup to the last drop."  The liberal Sydney Morning Herald claimed "many Americans will be left out in the cold."  Others fretted that the plan "will provide little short-term fiscal stimulus" and "have little impact" before 2004.


Concerns about ballooning deficits and the cost of war in Iraq--  Many writers who backed the plan's general thrust called its financing "the weak point" and worried about "further deterioration" in the deficit outlook, particularly "on the eve of a costly war against Iraq."  A Canadian commentator, though giving the plan an 'A' for "sound tax policy," conceded that "expensive tax cuts are a risky business" in the face of projected USG budget deficits.  France's right-of-center Le Figaro worried that "the slightest hitch...could bring on a new recession."


Plan 'anticipates' 2004 electoral contest--  Writers across the ideological and geographical spectrum connected the plan to the 2004 presidential elections.  A Spanish daily said Bush is "obsessed" with his father's "bitter defeat" in 1992.  He knows, another writer commented, that a weak economy is "his political Achilles heel."  The conservative Australian declared that Bush "has learnt from his father" and that "this is an intensely political package."

EDITOR:  Steven Wangsness

EDITOR'S NOTE:  This analysis is based on 40 reports from 20 countries Jan. 7-10.  Editorial excerpts from each country are listed from the most recent date.




BRITAIN:  "President Feelgood"


The liberal Guardian published this view (1/9):  "The good news about George Bush's package of accelerated tax cuts is that it is a courageous adventure in Keynesian supply-side economics to boost spending at a time of great economic uncertainty.  The bad news is that most of the supply is being piped directly to the rich.  The man who said he would govern for all Americans has decided that this will be done by feeding dollar bills to the very rich, in the hope that they will trickle down to the poor.  But on present evidence they will not even drizzle down.  Half of the president's package consists of the abolition of the tax on dividends....  In a democracy in which two-thirds of people own shares this may sound fair.  The trouble is that poorer people own their shares through the equivalent of pension funds whose dividends are already free of tax--so the benefit will be creamed off by the rich."


"The White House Strays From The Truth"


Gerard Baker, writing in the independent Financial Times held (1/9):  "When it comes to honesty, whether in the field of economics or diplomacy, the president and his team have evidently decided to take the conscience-free approach....  We face a disturbing and historic juxtaposition of economic and political forces....   We are at a historically critical moment for the U.S. and the global economy....  Where we need clarity, the leadership in Washington is providing obfuscated ambiguity....  Take the economy....  Looking at the condition...of the U.S. economy today, there is no way on earth you could honestly argue that...the priority is to eliminate a tax paid disproportionately by the wealthiest Americans on their long-term investments."


"Beating About The Bush"


The independent Financial Times editorialized (1/8):  "President George W. Bush's budget proposals provide little short-term fiscal stimulus. The attempt to make the tax system more efficient is welcome, but leaves something to be desired.  The cost is further deterioration in the budget outlook....  The full elimination of individual income tax on dividends will truly begin with income tax returns filed in April 2004.  The other measures--including speeded up tax cuts and transfers to state governments--would start to work sooner.  But, while the projected cost of the fiscal package over the next 16 months is almost 1 per cent of gross domestic product, the stimulus effect, during the 2003 calendar year, is considerably less....  Ending double taxation is to be applauded.  The unequal tax treatment of dividends causes economic distortions, including a bias in favour of retained earnings over payouts, debt financing over equity and share buybacks over dividends.  In terms of improved capital allocation, the incentive effect would be more powerful if the tax relief were concentrated at the corporate level, though the tax cut would also be more expensive.  Expectations of a boost to stock market valuations should be modest."


FRANCE:  "Tax Cuts According To Bush"


Guillaume Goubert wrote in Catholic La Croix (1/8):  “Every tax cut plan immediately raises two questions: is it economically effective and is it socially fair?  These questions are particularly pertinent when it comes to President Bush’s plan.”


"Bush, The Recovery And The War"


Stephane Marchand observed in right-of-center Le Figaro (1/8):  “The war-in-the-making against Iraq must not strike too severe a blow on American consumers and investors.  This is why yesterday President Bush launched a spectacular preventive therapy plan....  The Bush plan...was conceived as a shockwave for an economy whose recession is officially over....  But the slightest hitch, such as a war in the Middle East longer than planned and therefore more deadly, could bring on a new recession.  Some say that President Bush will not be reelected in 2004 if Saddam is still in power.  While President Bush seems to share the same belief, he has other worries as well.  While in France it is customary to joke about the U.S. President’s lack of broad education, there is one thing George Bush knows backward and forward, and that is what happened to his father....  This time around, the economic cycle seems to be in his favor.  But George Bush wants nothing left to chance.  A year from now, when the election campaign begins, the Democrats must not be in a position to say that Bush neglected the economy....  If the sun continues to shine for ‘W,’ the recovery will make the war less painful to swallow.  If Bush’s luck turns, the war could well sound the end of the economic recovery.”


GERMANY:    "Poor Financing"


Center-right Frankfurter Allgemeine observed (1/8):  “The success of Bush’s program is questionable.  Getting rid of taxes on stock dividends is long overdue, but it is doubtful whether this move will lead to a stock market euphoria, as predicted by the White House.  Giving companies more opportunities to write off expenses and pushing up the schedule for the planned reduction of income taxes are reasonable measures.  The weak point of Bush initiative is the financing.  Bush wants to pay for the new tax cuts with more credits, not with budget cuts, which means the U.S. deficit will go up....  Bush must have the courage to save money together with Congress to make the tax cuts possible.  Otherwise they might turn out to be a threat to the economy.”


"The Cost Of War"


Andreas Oldag maintained in an editorial in center-left Sueddeutsche Zeitung of Munich (1/8):  "It is unclear whether a few tax cuts can chase away the ghost of recession....  All in all, the economic risks for the United States and the world are much higher now than during the last Gulf War.  Back then, the United States could count on sharing the cost with its allies...ending up with a bill of only seven billion dollars....  The United States is rattling its saber at a time when the global economy is extremely unstable....  How many Iraq wars can the United States afford?  From a military standpoint, the Pentagon is undoubtedly capable of sending Saddam into the desert.  Nevertheless, the superpower’s hubris has made U.S. politicians blind to the economic challenges.  A global economic collapse would be as detrimental to Western values as power-hungry dictators in Baghdad and Pyongyang.  The United States should remember its responsibility as the world’s strongest economy, and this means doing more than helping out the American rich.”


ITALY:  "U.S. Pressing On Latin America"


Leading business daily Il Sole-24 Ore judged (1/9):  “Fiscal cuts, subsidies for the unemployed, tax deductions for business companies.  Strong and determined, Bush’s war against the U.S. economic crisis has broken out before the war against Iraq, if ever there is one.  But the work has just begun for the U.S. President.  The next strategic goal will be that of making up for the weakness of the domestic demand by strengthening foreign demand, working on two fronts: within the WTO, but, most of all, by speeding up the ambitious project for the creation of a single free-trade area of the Americas from Alaska to Tierra del Fuego, by 2005, according to U.S. plans."


"The Reagan Recipe"


A front-page commentary by Washington correspondent Vittorio Zucconi in left-leaning, influential La Repubblica declared (1/8):  “Consistent with the ideology and with the interests that have led him to the White House, Bush yesterday presented to the nation and to the new Congress his ‘growth and jobs’ plan....  The plan does not contain anything radically new, since it simply goes along the same path taken by Reagan and later abandoned by Bush father and by Clinton....  Bush, however, is making one step forward that not even Reagan dared to make.  Unable to completely eliminate taxes on capital gains...Bush, for the time being, is eliminating all taxes on stock dividends....  The ideology behind this plan is, in sum, pure Reaganism: only by returning billions of dollars to the richest people, in the hope that they may decide to reinvest them, the weak machine of the U.S. economy, stuck for the last two years, will start moving again and create new jobs....  Amid conflicting criticism from the left and from the right, all doubts remain about the effectiveness of a package that will affect the next ten years.”


"Bush:  Fewer Taxes And More Jobs"


New York correspondent Mario Platero commented in leading business-oriented Il Sole-24 Ore (1/8):  “President Bush...‘made history’ in three ways....  First, by outlining the extent of his economic plan, which is huge and unprecedented....  Second, by announcing elimination of taxes on stock dividends--a decision that will change the way companies are led, investments are planned, and capital is managed....  And, third, with his considerations and decisions, the President for the first time introduced ‘the class of investors,’ a new ‘social’ class across the board and capable of playing a decisive role in electoral consultations.”


AUSTRIA:  " Recklessness Or Courage"


Economic editor Michael Prüller wrote in centrist Die Presse (1/8):  "Bush's latest economic and tax proposals are as controversial as his foreign policy.  Tax reductions for wealthy capitalists and that on loan.  With this project Washington again strongly distances itself from common European practices.  Recklessness or courage after all?  At any rate 'leadership', and most Americans do not want anything else at the moment."


BELGIUM:  "President Bush Economic Plan"


Chief editor Yves Cavalier editorialized in financial L’Echo (1/9):  “One can probably blame U.S. President Bush for having prepared an economic plan that skillfully anticipates the electoral campaign which is shaping up for 2004.  Yet, in all the measures, one must point out the abolition of the tax on stock dividends.  Of course, there will always be an economist who will consider that it is ‘once again a measure for the rich.’  But that is a bit shortsighted and that certainly does not take one of the main reasons for the current difficult economic situation into account: the United States is experiencing an investment crisis much more than a consumption crisis....  Yet, one must understand a measure like the one George W. Bush just took as a way of restoring confidence among private stock owners, as it is they who will first and foremost benefit from it.  On the contrary, the reduction of the cost of the risk capital will benefit all, and more particularly businesses.  The latter should be able to find in the stock exchange the natural tool to finance their growth and their creation of jobs again."


"Ambitious And Necessary"


Serge Vandaele noted in financial L’Echo (1/8):  “President Bush’s bet appears both ambitious and necessary.  Indeed, everybody in the United States remembers the bitter defeat of George Bush Senior who, in 1992, and in spite of a triumphant military campaign during the Gulf War, lost to Bill Clinton because he had been unable to improve the country’s economic situation when he had to.”


"Who Will Suffer?  Probably The Poor"


Yannick Hallet declared in the conservative Sud Presse group of newspapers (1/8):  “It is mainly the rich who will benefit from George W. Bush’s economic plan.  Seventy years after Roosevelt’s New Deal, his plan is far from being as social.  Almost half of the $674 billion will make investors and speculators happy....  To avoid being too severely criticized, the President has included several minor social measures, such as payments to help unemployed find a job....  Big deal! At the same time, one percent of the taxpayers will benefit from 42 percent of the tax cuts generated by the suppression of the tax on stock dividends.  The poor will drain their cup to the last drop.  The upcoming war in Iraq is likely to lead to budget cuts.  Who will suffer?  Probably the poor, unless the prospect of the 2004 elections prompts President Bush to be more fair.”


"Bush's Achilles Heel"


Foreign affairs writer Carl Pansaerts remarked in financial daily De Financieel-Economische Tijd (1/7):  “Bush knows that the poor condition of the economy is his political Achilles heel.  The 2004 presidential elections are coming closer and Bush does not want to make the mistake his father made.....  Bush Jr. wants to win the battle for Iraq and keep the economy healthy to safeguard his re-election in 2004.”


CROATIA:  "Totalitarianism"


Nikolina Sajn wrote in Zagreb-based mass-circulation Jutarnji list (1/8):  "Today, Bush is getting a second chance to push his internal affairs plan.  It is expected that he will impose conservative reforms and increase tax benefits, as well as decrease funds for welfare programs.  He should also be able to get his military budget without problems, as well as probably push through proposals such as oil wells in Alaska’s national parks."


DENMARK:  "Proactive Bush"


Independent business daily Børsen judged (1/9):  "Bush is attempting to do something about the U.S. economy.  Both Bush and Greenspan are attempting to prevent the world economy from stagnating.  In comparison, Europe is totally inactive....  The ECB ought to drop the interest rate."


HUNGARY:  "Bush-Injection"


Deputy Editor Tamas Boronkay asserted in his influential Hungarian-language business-oriented Vilaggazdasag (1/8):  "President Bush’s package favors mainly the rich.  But regardless of the debates about the package a good thing about it is (in case Congress passes it) that it can give a boost to the American economy.  There will still be some elements of uncertainty (in the economy), the planned war against Iraq, for instance.”


NORWAY:  "Tax Package To The Richest"


Foreign Affairs Editor Erik Sagflaat commented in the social democratic Dagsavisen (1/9):  “A new present at the billion dollar level from President George W. Bush is supposed to moderate the effect of a war in Iraq for the USA’s richest.  The poorest will foot the bill.…  President Bush senior won great popularity after the relatively quick victory in the Gulf war in 1991.  He lost the election the next year because he didn’t get the economy fixed.  Bush junior has reason to fear that history might repeat itself.”


ROMANIA:  "Bush Economic Plan"


Political analyst Cristian Campeanu commented in the opposition daily Romania Libera (1/9):  "The Democrats are counting on their main ideological trump card, and are trying to turn the whole issue into a social class dispute.  On the one hand, this strategy could prove profitable since, in this way, the American left finally has a good opportunity to bring back to the attention of public opinion the old demagogy of the ratio between the rich and the poor.  By strengthening its voice, the left might gather a few more votes in the 2004 elections.  On the other hand, though, reviving the social class dispute issue could show how desperate the Democrats are to make themselves visible again.”


SPAIN:  "Questionable Stimulus"


Left-of-center El País held (1/9):  "There are reasons to share the fear of those who believe that [Bush] could become the first U.S. President to create more problems, in and out of the U.S., than he has tried to solve.  For the moment, the [deficit] balance is not comforting: the public surplus that Democrats left, has faded away in tax cuts that haven't improved the confidence of U.S. citizens."


"Bush Plan And The Memory Of Keynes"


Business daily Expansión held (1/8):  "Has Bush found the appropriate prescription?  Only time will tell....  Each tax cut, especially if it impacts those with enough income to create wealth, the savers, is good and desirable.  Also, a tax stimulus is particularly appropriates in recessions, which contain less danger, like the possibility of a return of inflation.  However, Washington, far from containing spending to make this a sustainable plan, is increasing it, especially in the area of defense....  The impression is that we are faced with a kind of fiscal reform disguised as an economic stimulus package that can increase the public deficit in the next years and that threatens to cause an increase in interest rates.  So, what's the last aim of this plan?  Bush doesn't want to leave the economy in the second tier, which could lose him many votes.  His father lost the presidential election because of the nineties recession and [George W.] has this image fresh in his mind.  The main consequence of the package will be felt in 2004, the year of the presidential elections, and then, will loose steam.  Bush has taken on Keynes' assertion that 'in the long term, we'll all be dead.'  Now all that is left is for Congress to support it."


"Bush And Taxes"


Centrist La Vanguardia editorialized (1/8):  "The [Republican] party's majority in both houses of Congress gives more chance of success to the proposal....  The functioning of the American Congress gives a great power to certain key legislators, whose interests have to be preserved in order to assure their favorable vote....  Democratic opposition in the House of Representatives, which submitted its own fiscal plan last Monday, will predictably focus its criticism on the presumed social inequality of the White House's proposal."


"Bush Has It Wrong"


Independent El Mundo editorialized (1/7):  "The Bush [economic] plan has only two 'small' mistakes: justice and effectiveness.  The tax exemption for dividends will only benefit the very small percentage of society that are shareholders....  In the end, this is a big benefit for the most rich...disguised as an economic stimulus....  Important economists have denounced that the only sure thing in this plan is that it will aggravate the budget deficit...and this on the eve of a costly war against Iraq....  It's clear that a recovery 'package' would be good for the American economy, and by extension the whole world.  But it can't be used to introduce unfair measures, and in addition, ineffective ones.  The Democratic opposition and the moderate Republicans can reform through the Congressional process this plan by Bush, who is obsessed with not losing with the economy what he has won on the international stage, as it happened to his father."




AUSTRALIA:  "Bush’s Plan Is On The Money"


The business-oriented Australian Financial Review editorialized (1/9):  “The bias of Mr. Bush’s proposal towards high-income earners, the potential for tax avoidance in the present structure of proposed tax reform, and the sheer cost of the reform make it almost certain that the package will be substantially modified by Congress.  No doubt the Bush administration has designed its proposal with an eye to the coming political negotiations.”


"Bush Knows That It’s (Still) The Economy"


An editorial in the national conservative Australian observed (1/9):  "The President does not have to face the people until November 2004, but it is obvious he has learnt from his father what plays with the U.S. electorate, and is taking no chances....  This is an intensely political package involving astonishing amounts of money--the work of a White House that knows its win in last November's Congressional elections and the patriotic support generated by the threat of terror attacks and the possibility of war against Iraq are no guarantee of re-election in 2004.  It rewards the rich but it also provides assistance to the middle-class Americans who will decide the election....  The impact of Mr. Bush's package will take years to work its way through the U.S. economy, and even if he wins a second term he will have retired before its impact is over.  Whatever happens, the President's plan demonstrates that for man with a chequered career path before acceding to the Oval Office, George W. Bush remembers and learns."


"Bush’s Gamble With Tax Cuts"


An editorial in the liberal Sydney Morning Herald stated (1/8):  “Theoretically the tax cut is sound because it will end the double taxation of company profits, at the source and when they are distributed to shareholders.  But the stock market and the economy are not the same things.  Historically the so-called 'trickle-down' effect has consistently failed to provide the hoped for stimulus, and assist the most needy.  Even a generous assessment...must conclude that many Americans will be left out in the cold....  It is worth noting that the cash injection the package will deliver is timed to coincide with Mr. Bush's campaign for re-election in 2004.  Which means Mr. Bush may be right to insist it is all about jobs--not least his own.”


CHINA (HONG KONG SAR):  "U.S. Reduces Tax On Stocks"


The independent Chinese-language Hong Kong Economic Journal editorialized (1/8):  "Regardless of whether or not [Bush's new tax reduction proposal] will work, it makes sense that reducing taxes on stock interests will stimulate the stock market.  A rebound in the U.S. stock market will eventually benefit the global economy.  The White House predicted that the new method will enable the Dow Jones index to climb 10-20 percent, increasing overall investment, creating more job opportunities, increasing consuming power and leading corporate profits to rise.  The public would be the ultimate beneficiary.  However, this all sounds too good to be true.  For a popularly elected government, no policy is removed from the election campaign.  The new proposal for tax cuts is designed to attract middle-class voters--the investor class--who will comprise two-thirds of the voting population in the 2004 presidential election."


JAPAN:  "Bush Trying to Boost Economy"


The business-oriented Nihon Keizai editorialized (1/9):  "The Bush administration announced a 670 billion USD economic stimulus package over the next 10 years to boost the ailing economy, in a bid to get President Bush re-elected in the 2004 presidential election.  But the rival Democratic party expressed concern over a possible negative effect of the projected Bush stimulus package on the economy: an increased fiscal deficit....  There are concerns that the package, coupled with expected increased spending for a possible Iraq campaign, will result in a sharp rise in 'twin' fiscal and revenue deficits, forcing a rise in long-term interest rates. Despite this, Mr. Bush decided to give top priority to boosting the economy in order not to follow in the footsteps of his father former President Bush, who despite his leadership in winning the Gulf War, failed to get re-elected because of economic factors."   


INDONESIA:  "To Improve His Image, Bush Launches An Economic Stimulus Package"


Leading independent daily Kompas commented (1/10):  “Although the [September 11] tragedy constituted a hard blow to the [U.S.] economy, attention to efforts to improve the economy on the part of Bush administration has been lacking.  On the contrary, Bush tends to stay away from the economic issues, but has been very preoccupied with the campaign against terrorism, attacking Afghanistan and likely with attacking Iraq.  Inevitably, the lack of economic development has been used by the Democrats as in issue to win the 2004 elections.  And before their image gets worse, the Republicans are now launching restoration programs.  Bush's efforts to change the negative image in the economy are apparent in the replacement of Secretary of the Treasury Paul O’Neill and the White House Economic Advisor Lawrence Lindsey.”   


PHILIPPINES:  "Bush Endangers World Economy"


Columnist Boo Chanco wrote in the business section of the independent Philippine Star (1/10):  "What the White House proposes for the U.S. economy always has far reaching consequences for the rest of us....  If that proposal is passed by Congress but fails to stop the U.S. economy from going into a threatened deflation, we all suffer the consequence....   The question now is, will the plan of Mr. Bush work?...  Those of us in developing countries know trickle down economics simply does not work fast enough to make a real difference....  What the American economy seems to need is a recovery plan that kicks in immediately, not years from now, and one that puts money in the pockets of people who need it and will spend it right away to lift the economy fast.  The problem with the dividend tax cut is not only that it benefits the rich more but also, its benefit is felt a year after, or only after those affected have filed their income tax returns for this year....  We normally shouldn't care if the Americans want to ravage their economy by allowing their President to carry out his narrow ideological agenda of catering to the already rich and powerful in American society. Our problem is, if America fouls up big time on their economy, we all suffer the consequences.  That's thanks to the flawed world economic structure today.  The rest of the world can only hope and pray that no matter how an American President endangers the world economy, things will work out fine in the end."




CANADA:  "Tax Cuts And The Phony Deficit Scare"


Terence Corcoran judged in the conservative National Post (1/9):  "The custodians of big government spending are circling their wagons to set up a defence against calls for tax cuts.  And, man, are there a lot of wagons!....   You would not believe how many chickens can be cooked up as excuses not to cut taxes on dividends, not to cut top marginal tax rates, not to lower the tax burden....  Bush-style tax cuts are also said to be inappropriate because they 'will cost' too much.  This is true if you believe governments are the owners of the money and that every time they cut taxes it is a 'cost' and every tax increase is a 'gain'--a world view that turns the economy upside down....  Through it all, Mr. Bush and other proponents of tax cuts are dismissed as being 'ideological.'  Well, when did that become a crime?....  Every argument over taxation is grounded in ideology, none more so than the rank claims of those who refuse to support tax cuts."


"Don't Try This At Home"


Toronto's leading Globe and Mail published this view by economist Don Drummond (1/9):  "President George W. Bush has proposed reductions to Americans' taxes totaling more than $600-billion....  Give these measures an 'A'  for sound tax policy but a 'D' when it comes to short-term economic effect, where little stimulus can be expected....  Political wrangling will delay implementation for months and much of the relief, particularly on dividends, won't reach Americans' wallets until 2004.  But the package does improve the U.S. tax structure....  It is quite true that dividend income received outside of tax-sheltered plans is skewed to the rich.  But Mr. Bush's plan has a number of measures for low- and modest-income taxpayers, particularly families with children.  The criticism that best hits the mark is that expensive tax cuts are a risky business when the U.S. government will be awash in red ink for as far as the eye can see.  Along with Americans' high household debt, impaired corporate balance sheets, a huge trade deficit and large fiscal deficits at the state level, the U.S. federal deficits are driving a dangerous dependence on foreign savings.  This sounds like Canada 10 years ago.  Having tried the deficit and debt route and still not found a happy ending, Canadians will not support Ottawa if it moves to match the U.S. tax cuts at any cost."


"Electoral Dividend"


Editorialist Maurice Jannard opined in the centrist French-language daily La Presse (1/8):  "Specialsits are almost unanimous in saying the new initiatives will have little impact on the economy in 2003....  In the short term however stock markets should benefit from the announcements....  Some have rightly pointed out Bush has smartly put in place measures he can boast about when he runs for reelection in 2004....   As a whole, President's Bush budgetary initiative is in line with the Republican tradition.  It should not however find much echo in Canada, where citizens have a more egalitarian view of society."


"Bush's Other War"


Chief editorialist Jean Robert Sansfaçon argued in the liberal French-language Le Devoir (1/8):  "Only one of the important measures is new, it's also the most costly, i.e., $364 of the program's $684 billion:  the reduction of the tax on dividends....  In the longer term, the measures being considered by the right will certainly engender positive results by inciting Americans to invest their savings in a fiscal environment favorable to risks taking.  It has been proven that countries where the fiscal regime is the lightest produce greater economic activity even if that is not where you find the most equitable sharing of wealth."


ARGENTINA:  "U.S. Tax Cut"


An editorial in leading Clarin commented (1/10):  "U.S. President George W. Bush has launched a tax cut program aimed at boosting the U.S. economy....  His measures were received with skepticism even amid the economic and financial establishment.  One of the main objections is that tax cuts could increase the imbalance of public accounts....  According to orthodox standards, the fiscal deficit increases interest rates and generates uncertainty, which reduces possibilities of growth....  On the other hand, there is uncertainty whether the program will be able to counteract the concern raised by the war on Iraq, which, if deepened, could increase oil prices, thereby deteriorating expectations of investors and consumers, both in the U.S. and the rest of the world."


"Bush Launches Broad Tax Cut"


Jorge Rosales, Washington-based correspondent for daily-of-record La Nacion wrote (1/8):  "President George W. Bush submitted an ambitious plan of 674 billion dollars to boost the U.S. economy based on tax elimination, in a move to prioritize domestic issues when all eyes are placed on the war on Iraq.  In this way, Bush seeks to regain the initiative in economic issues, the weakest side of the Republican administration, which will be the central issue in defining the 2004 elections, when Bush will seek his reelection....  According to his style, Bush wielded a huge pressure on U.S. Congress to obtain its support for the economic measures, because while Republicans have the control of Congress they do not have enough majority to guarantee the approval."


BRAZIL:  "Bush's Effort Not To Repeat His Father's Mistakes"


Business-oriented Valor Economico editorialized (1/9):  "The main goal of President Bush's package is to try to ensure that the U.S. economy resumes growth similar to that of the past decade....  Bush will run for president again in 2004 and does not want to meet the same fate his father did in 1992 when--despite the popularity accorded him after the Gulf War--he was defeated because of the country's poor economic performance.  One of the problems with the measures W. Bush has proposed is that they do not take into consideration the impact that a likely war against Iraq will have on the economy (not to mention what North Korea's nuclear challenge may represent)."


"Fiscal Package"


Liberal Folha de S. Paulo opined (1/9):  "The purpose of the Bush administration's fiscal package is to encourage investment in the stock market....  The new fiscal package is expected to raise the deficit to US$250 billion in 2003, without including the cost of an increasingly probable war against Iraq. This enlargement of the deficit will result in an increase of the public debt.  In principle, an increase of the public debt seems to represent an appropriate decision at this moment for the U.S. economy....  But several analysts have warned about the limits of the fiscal package with regard to its goal of reactivating the U.S. economy, since a significant portion of its tax exemptions will be directed to the wealthiest sectors of the population.  Bush will run the risk of increasing the public deficit without ensuring the resumption of sustainable growth."


"An Innocuous Plan"


An editorial in center-right O Estado de S. Paulo judged (1/9):  "Despite their magnitude, President George W. Bush's measures to revitalize the U.S. economy have received more criticism than praise, and even the most favored sector, the stock market, has reacted negatively to the proposed stimulus.  The U.S. economy basically needs resumption in consumption to bring investment back.  But Bush's package has few instruments capable of forcing an increase in demand for consumer goods, especially in the short run....   The measures have been considered scandalous because they favor the rich only, and they will increase savings, not consumption....  As Democratic representatives have stated, it would be better to substantially increase assistance to the unemployed and the states.  The dollar will be weakened, which could affect the entire world economy."


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