Aid President George W. Bush in Policy

¶ … 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

SURPLUS AMOUNT

Total Surplus

Social Security Lock Box

On-Budget Surplus

TAX CUTS AND SPENDING

Tax Plan

Medicare Rx & Reform

Health

Defense

Education

Compassion/Charity

Agriculture

Housing/IDAs

Environment

Crime & Other Domestic Issues

Savings from Government Reform

Interest Cost

Total Tax Cuts & Spending

Source: Press Release, "Budget Numbers"

Table # 2; Surpluses

Budget Surplus

Administration's Proposals

Estimate for 2002-2006

586 billion

Estimate for 2001-2010

No estimate made

Economic assumptions

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

Tax cuts

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 expensive for the American people. A weak dollar policy is inflationary; this would put upward pressure on the interest rates as bond investors would demand an extra return for a future purchasing power that has been lost. The downfall of the dollar would also deter foreign investors as there is an inevitable risk of holding depreciating dollars. This would prompt them to demand a higher rate of return which will in turn create an upward pressure on interest rates. The upward pressure on the interest rates has a direct impact on the stock market. Stocks with rich valuations based on future growth would be hard hit. Higher interest rates would also be unkind on the entire housing industry thus causing the figures of growth to reverse and plummet eventually. While a smooth and slow descent of the dollar could work out some advantages such as balancing the entire world economy, a steep and unpredicted slide in the greenback could only spell disaster in all economic levels. This has to be countered with several measures such as building the investor confidence, regulation of interest rates and so on. The dollar is worst affected when leaders of the G7 nations and governors of central banks across the region, in unison, sign ideal market determined currency rates. This would impose a tremendous pressure on the dollar thus prompting it to take a dive.(Weak Dollar Medicine: Motley Fool Take)

There seems to be no concrete proof that holding foreign stocks will yield a bankable currency benefit. During the period 1997-2002, when the dollar was on its gain run, American investors across the world wide market were engaged in a losing game. There is widespread belief that the economic policies of the administration are fundamentally inconsistent thus triggering a fall in the dollar. In truth, there is a lower level of confidence in the dollar and it is set to continue southwards and this has not a lot to do with the administration's economic policy. The general idea is that, once a currency tends to go one way or the other, it will continue to do so and call for a policy response. With the presidential elections around the corner, it would take a great deal of drive and effort to make the buck do a turn around. (Playing the Weak Dollar)

The Chairman of the Federal Reserve, Dr. Alan Greenspan told the Congress recently that a dramatic slowdown in productivity would trigger a stronger overall job growth this year. This is the steadfast belief of the administration too. Productivity is nothing but a measure of how much workers produce per hour. With business having invested huge sums in cutting edge technology and imposing an altogether new work culture that involves better and effective management, productivity has grown at a rapid pace. In the long run, productivity leads to job growths and higher standards of living. On the other hand, in the short run, it has aided in making the current labor market reach its most feeble since the great depression. The 12-month percentage change in the nation's payrolls has been lifelessly flat for 31 long months. This is the longest such stretch ever since the Labor department began monitoring and tracking data in the year 1939. The administration however has an answer. In its semi-annual economic forecast, a great deal of change is predicted during the year. Growth of productivity is expected to slow down from last years annualized rate of 4.2% to a marginal rate of 1.5% this year. Given below is a graph detailing payroll growth for the period 2003 and 2004.

Graph #1; Monthly change in the U.S., non-farm payrolls. (In thousands)

The key to job growth may be a drop in productivity)

The issue of security has gained wide prominence and a broader scope since the attacks on the world trade center on September 11, 2001. This was more than just an attack; it was an incursion into the sovereign territory of the United States of America and an all out war declared on the American people. The need for greater intelligence mechanisms, higher levels of alertness and greater inter-agency coordination has been felt ever since. This has prompted the administration to restructure and give more teeth to existing agencies such as the National Security Agency (NSA), The Central Intelligence Agency (CIA), The Federal Bureau of investigations (FBI) and other intelligence and counter terrorism units. The administration has also effectively and promptly created an independent agency; The Department of Homeland Security (DHS) headed by Mr. Tom Ridge.. (The White House, Washington)

The singular aim is in making the United States of America more secure and a safer place to live in. In a world filled with threats from all dimensions, there is greater need for security and allied partnerships to fight out the root of terror. America is committed to root out terrorism and outlawed infrastructure not only from its mainland but also from any part of the world. It aims at making the world more peaceful and free from the nightmares of terrorism. The administration in its turn has concrete policies that ensure tough measures to be taken to fight terror within and across borders. The events of September 11 forever changed the perception of internal security and external threats. It has put the administration in a role of a policing agent who is a custodian and guardian of individual and collective freedom. (The White House, Washington)

America initiated the war on terror in many phases, politically, militarily, economically and geographically. The campaign in Afghanistan saw that country return to civilization. A comprehensive sense of security has been brought about ever since the fundamental Islamic outfit of the Taliban has been ousted. The Taliban and its association with outlawed regimes such as the Al-Qaeda have proved a disaster and has time and again threatened the security and peace of many a country across the world. This campaign initiated by the administration has arrested the spread of Islamic terrorism and cut down sleeper cells of the Al-Qaeda that have been an ominous presence far and wide. There has been a growing and genuine concern among members of the administration that terrorism should be rooted out in all fronts and boundaries that appreciate freedom and sovereignty. Those countries and agencies that use terrorism as an means to achieve their objectives shall be severely dealt with as in the case of Afghanistan. The administration recognizes North Korea, Iran and Syria as rogue states and the axis of evil. It is committed to extend the war on terror on all fronts no matter what the magnitude and the geographical barrier. (National Security)

The campaign on Iraq and the ouster of Saddam Hussein is yet another example of America's foreign policy that upholds the values of freedom and strikes down upon regimes that oppress their people. The regime of Saddam Hussein was no different from a band of thugs who seized power in a country with vast resources. The threat of Weapons of Mass Destruction (WMD) is real and poses a great risk to countries such as the United States of America who value the tradition of democracy and uphold the principles of freedom. Chemical, Nuclear and Biological weapons could fall into the hands of rouge states and terrorist infrastructure which in turn could threaten other nation states. Iraq was one such country which committed itself upon proliferating Weapons of Mass Destruction (WMD) and terrorist outfits. (National Security)

In trying to achieve supremacy in the gulf region, it took to devious plans which were fortunately checked by the United States along with the coalition formed to initiate and conduct the War on Terror. The administration in cooperation with the international community has devised several plans and policies to check and arrest the onslaught of terrorism. It seeks to work upon nonproliferation laws to check the spread of Weapons of Mass Destruction (WMD), it calls for the restriction of sales and supply of nuclear know-how, it seeks to put in place measures that check the development of Weapons of Mass Destruction (WMD) by regimes under the veil of legitimacy; and calls for expand effort to seek and destroy nuclear material. (National Security)

The USA Patriot Act has been a key piece of legislation that has found greater relevance in the era post 9/11. It has played a very vital role in protecting the homeland enabling the federal government to apprehend and bring to America terrorists, disrupt their cells and infrastructure, takeover their assets and so on. This has given more scope to all law enforcement agencies that carry out an active role in the war on terror. The administration in its campaign against terrorism has put forward several policies that could well be the defining pillars on security. It calls for detailed and well worked law enforcement cooperation among many agencies so as to fight terror on all grounds and dimensions. The United Nations being the overseer of world issues, the policy calls for swift and time bound passage of all United Nations resolutions so as to effect speedy action. (Homeland Security) & (The Department of Homeland Security)

There is a need for the expansion of the G8 Global Partnership so as to include more and more nations in the fight against terror and the spread of Nuclear Weapons and Weapons of Mass Destruction (WMD). Systems of controls against enrichment and reprocessing of Nuclear Weapons need to be put in place so as to effectively check and arrest illegitimate proliferation. The Nuclear watchdog of the United Nations, the International Atomic Energy Agency (IAEA) needs to be given more autonomy and strength to oversee matters that involve nuclear proliferation and control. The Administration has from time to time disseminated intelligence reports regarding various outlawed regimes and groups that involve themselves in nuclear proliferation. (National Security)

The case of Dr. Abdul Qadeer (AQ) Khan, who is regarded as Pakistan's father of nuclear technology is very notable. For years the Administration provided information of Dr. Khan's involvement in an international nuclear ring. Pakistan has recently uncovered the doings of Dr. Khan and this has proved to be a great success to the Administration. Over a span of a few years, he along with many other people across the world has successfully sold nuclear technological know-how to countries such as North Korea, Iran and Libya. The operation was grounded to a halt largely by the combined effort of Intelligence agencies of the United States and the United Kingdom. The Administration also welcomes Libya's change in nuclear policy and methods. (National Security)

Col. Muamar Qadhafi has pledged to put an end to weapons of mass destruction and in doing so sets an example to other regimes that may follow suit. On 19th December 2003, Libya has made a five pronged commitment to the international commitment thus; Declaration of all nuclear related activities to the International Atomic Energy Agency (IAEA), Systematic elimination of inter-continental ballistic missiles (ICBMs) with a range exceeding 300 km while carrying a payload of 500 kg, measure to accept international inspections that ensure effective and systematic compliance with the International Atomic Energy Agency's nuclear nonproliferation code, signing the additional protocol of the International Atomic Energy Agency (IAEA); and Elimination of all chemical weapons, stocks and munitions and accede to the chemical weapons convention. Libya is currently working with the United States, the United Kingdom, the International Atomic Energy Agency (IAEA) and The Organization for the Prohibition of Chemical Weapons. This success has largely been achieved due to the efforts of the American administration. (National Security)

The future of the United States is a consolidated one with an offering of multidimensional roles. The United States is already a world leader; it merely needs improved and marked consolidation across the globe to establish its presence. It will in due course become a body that upholds diplomacy and freedom in all parts of the world. In doing so it is slated to be a superpower second to none. It is only this time in a much huger magnitude than its current form and scope. A mass consolidation across continents and countries would yield the United States the status of a conglomerate that in partnership with various other countries and organizations would promote and sustain world peace, economic, social and political sovereignty and combat threatening issues such as terrorism and poverty. (The Cold War Museum)

The cold war was an immediate fall out of the Second World War which saw the formation of two powerful blocs. The United Socialist Soviet Republic (USSR) along with its communist adherents formed one bloc while the United States of America along with its allies formed the other bloc who believed that communism should be halted in its tracks before it could "engulf" the entire planet. Both blocs came to the brink of war several times. Since the era did not witness any catastrophic outbreak of war, it was named as the cold war era. There however were a number of skirmishes that kept the world on its toes in during several turbulent moments. Defense spending was at its heights with top secret military weapons and strategies being formulated. The main aim was to outdo the opposition in one way or the other. A great deal of covert operations were undertaken against each other by either blocs in the hope of being able to source the latest information that could be a key deciding factor that could help tem maintain an edge over the other. (The Cold War Museum)

Nuclear technology was refined and put to use. The use of communications and electronic devices were regularized and there was widespread application of sophisticated technology that guaranteed supremacy over the other. A number of incidents such as the Cuban missile crisis, the assassination of the then President John F. Kennedy, strengthening and empowering the intelligence and defence community etc. were deciding factors that had a place in the cold war era. Nuclear proliferation among members of the blocs was at its highest during the cold war era. Finally in the late 1980s the collapse of the Soviet Union came as a marked end to the cold war era. It is regarded as a great American triumph over a menacing situation that had lasted itself a few decades during which the threat of a nuclear confrontation loomed large.(The Cold War Museum)

The twentieth century has been a mute witness to many conflicts. The early part of the century saw the occurrence of not one but two World Wars that transformed world history. In the almost immediate aftermath came the Vietnam War. It has been a very troubling and traumatic issue and has not been easily digested by both the Americans as well as the international community as a whole. Former Secretary of Defence during the Vietnam War, Robert (Bob) McNamara sums is to be a colossal disregard to human life and property. He says "The 20th century was the bloodiest century in human history killing around 160 million. If similar conflicts were to extend into the 21st century, the numbers would be far larger. Is that what we want in the 21st century? I think not, If we don't want it, I want to suggest that the first step in our process of avoiding it would be a better understanding of what happened in the 20th century." (Former U.S. Official draws lessons from the Vietnam War)

America has since the war moved forward and improved its foreign policy and international relations. Mr. McNamara maintains that Officials of the United States and Vietnam "did identify opportunities that were missed, and examined as to why they were missed and arrived at conclusions that can be applied to the future." The United States, according to him, has learnt several lessons from the Vietnam War, they include; understanding the mindset of the adversary, communicating with the adversary, never unilaterally apply military power; and understand that there are some problems for which there may be no solution at all what so ever. This standpoint has helped the United States gain a better and clear understanding of its military strategy and the importance of international relations. (Former U.S. Official draws lessons from the Vietnam War)

The current focus of the world at large remain on oil as it is been a source of massive revenues and has helped shape foreign policies, boost trade and commerce, improve bi-lateral relations, strategic partnerships and a healthy economic establishment of business. The oil rich countries of the Middle East have been a source of huge revenues and monumental oil wealth. Better known as black gold, it has helped transform the economies of the world and involves huge business potential and money. Russia and the Caspian have been identified as huge storage grounds for oil apart from the United Arab Emirates, Saudi Arabia and other Middle East countries. Given below is a graph that illustrates the world's remaining oil reserves.

Graph # 2; The Remaining Oil Reserves of the World