aid President George W. Bush in policy formulation. It is an all-inclusive paper dealing with a wide range of issues such as the American economy in general- discussing issues such as budget deficits, tax cuts, medical assistance and benefits for retired people, the weakening American dollar, allocations for the military, intelligence and homeland security, job growth and the regime and policies of free trade. With regards to security, it features the recent American initiate on the war on terrorism. The issue of Weapons of Mass Destruction (WMD) and nuclear proliferation are discussed quite at length.
Another aspect listed in the paper is the 'future', as it was viewed from the era of the Vietnam War. The relevance of the cold war is also outlined as a great American victory. Compelling issues such as the role of oil, OPEC, the Middle East and the socio-political and economic situation after the incidents of September 11 are addressed. To top it off, the role of the United States government is outlined and made easy to understand. The governmental role is three pronged involving its role as a guardian whose primary responsibility involves the protection and safeguard of the American people, its economic role as a custodian of the economic agenda and implementation of the same and upholder of the principle of freedom in all dimensions be it economic, social or both.
The economy of the United States of America has taken a beating in the recent past. Several factors such as tax cuts, outsourcing, job creation and so on are concerning issues. However, there is still the light at the end of the tunnel. The ambitious idea of the government to spend 1.6 trillion dollars over the next seven or so years has met fierce criticism. In order to put the tax cuts in place and running the government would be set back by about 4-6 billion dollars. It is so because, reorganizing the tax code will elevate a good number of middle class tax payers into a higher bracket. In order to push them back to their bracket and implement other modal codes the United States treasury needs to allocate about 2-2.2 trillion dollars. (Bush's tax cut) & (Economy: Job Creation)
The appreciable factor in the entire issue is the surplus which is estimated at 5.6 trillion dollars spread over the next ten years. There is also a projection of a 500 billion dollar from Medicare surpluses. The democrats on the other hand intend to spend the entire Social security and Medicare surpluses towards paying off debt. This however cannot be a favourable idea since it leaves the government with no table funds. A better and agreeable solution would rather be paying up a whopping 80% of the debt, subtracting 2 trillion dollars from Social security surpluses and using the remaining 600 billion dollars as an investment into the promising avenues of the stock market. Thereafter, a reserve account can be created to haul in the funds that have come by way of medical surpluses which amount to 500 billion dollars added up with an extra 340 billion. (Bush's tax cut) & (Economy: Job Creation) proposed increased spending calls for various allocations that come in form of educations, military salaries, prescription drugs, 4.9 billion dollars for sprucing up national parks, 700 million dollars for mentors of those children whose parents face prison terms and 238 million dollars allocated for spending on Medicare in the recent future. The tax cuts on dividends and long-term capital gains is highly beneficial since it would end the double-taxation of corporate profits that have been a grave cause for concern. Eventually, dividends would be tax free but with a fine-print. A company that pays no amount as taxes shall not be able to pay tax free dividends to its shareholders. To put it more lucid and comprehendible, dividends will be tax exempt only if they have not exceeded a company's taxable income minus dividends paid. This is aimed at cutting short massive tax avoidance adventures by heavy weight corporate. This apart there are several issues of concern that need to be addressed by the administration. Despite a huge uptrend in the stock market and the housing industry, latest figures suggest that there has been a widening wealth gap. Another major economic indicator, the job situation also seems to be on a downslide.
Bush's tax cut) & (Economy: Job Creation)
During the period 1992-2001, the net wealth of low-income U.S. households increased by a mere seven percent, a figure that rose from 6,261 to 6,720 dollars. In comparison however, the net wealth of all U.S. households increased by 42%, a figurative increase from 60,695 to 86,100 dollars. In the year 2001 however, the net wealth of the poor household was 6,720 dollars compared to 86,100 dollars for the moderate U.S. household which indeed was a sizeable wealth gap of thirteen to one. The unemployment rate on the other hand too has zoomed up from 4.2% in 2001 to 5.6%. It is a clear 33% increase and stands above the five percent rate. This is a serious issue that needs to be addressed. A figure estimates the number of jobless Americans at about eight million. The tax cut plans are a welcome relief and a matter to cheer about in this economic situation. Every American who is a tax payer shall be eligible to relief. The average relief brought about by the plan for a family of four with two children will be about 1600 dollars. (President George W. Bush - remarks on tax cuts')
The amount equates to the average mortgage amount for a month or an entire year's tuition fees at a community college or the average cost of gasoline for two cars in a whole year or cost of power for an average Californian family in one whole year. It is a meritorious plan that is aimed at addressing the struggles of American families. Moreover it is a fair course of action as it does not discriminate among anyone whosoever. Any person who is a tax payer can enjoy the benefit of the tax cut program. Americans are segregated into five income tax categories. They are; the 15%, 28%, 31%, 36% and nearly 40%. The tax cut plan that has been featured aims at reducing the number of groups into four, the new groups being 10%, 15%, 25% and 33%. (President George W. Bush - remarks on tax cuts')
Another key area to be put under the scanner is the federal deficit. The levels touched an all time high in the year 2003 and are expected to climb even higher this year. During the fiscal year 2003, the United States recorded an annual budget deficit of 374 billion dollars. The figures in the immediate preceding year were marked at 158 billion dollars. The annual budget deficit figure projected for this year is pegged at 477 billion dollars as estimated by the Congressional Budget Office. However, the administration in its own review has termed the figure to be a colossal 544 billion dollars. An independent working body, the Citizens for Tax Justice, recently conducted a full scale study of the administration's tax cut regime and made a few notable observations; in 2004, 47% of taxpayers will receive 100 dollars or less. 63.4 million Taxpayers will receive an average of 19 dollars, In the year 2005, 74% of taxpayers will receive 100 dollars or less. 97.9 million Taxpayers will receive an average of 5 dollars, in 2006, 88% will receive 100 dollars or less. 118 million taxpayers will receive an average of 4 dollars; and finally, the wealthiest Americans across the country will receive a gross 96, 634 dollars in tax cuts over the next four years. (Jobs and the Economy)
Given hereunder are three tables that outline the Bush administration's budget for the period 2001-2010. It indicates a surplus of 265 billion dollars.
Table # 1; Budget 2001-2010
Social Security Lock Box
TAX CUTS AND SPENDING
Medicare Rx & Reform
Crime & Other Domestic Issues
Savings from Government Reform
Total Tax Cuts & Spending
Source: Press Release, "Budget Numbers"
Table # 2; Surpluses
Estimate for 2002-2006
Estimate for 2001-2010
No estimate made
Uses lower estimates of Congressional spending & 2.7% annual growth
Source: NY Times
Table # 3; How Surpluses would be used
USAGE OF SURPLUS
For fiscal years
483 billion; total $1.3 trillion by 2010
Some major spending proposals
46 billion for health care
13 billion for education
25 billion for defense
Source: NY Times, (George W. Bush on Budget & Economy)
The American economy has for a while been reeling under the pressures of a weak dollar. This has had quite a serious repercussion on the overall economic scenario. A weak dollar cannot buy much. This means that foreign goods would turn out to be more…