To boldly push forward, the Republican Party's economic stimulus package was announced by US President George W. Bush , on Tuesday. He unveiled a 10-year, US$600 billion "growth and job" package. The package calls for the elimination of taxes paid on stock dividends, speedy implementation of the income tax cuts approved by the government two years ago, and so on. In response to the Democratic Party's allegation that Bush cares only about the wealthy class, predictably the White House will seek to extend federal unemployment benefits for more than 750,000 Americans whose benefits expired on Dec. 28.
The Republican Party estimates that this package should be able to help the US economy grow by US$80 to US$100 billion within the first year. US stocks will increase in value by 10 percent on average. The expenditure of the consumers will also increase. The White House staff further feels that the package should be able to accomplish both political and economic ends. It will help economic growth, and facilitate a massive decline in the current 6% unemployment rate. It will also help Bush face the challenge in the next presidential election with ease.
Of course, the package will also cause the federal deficit to grow massively. The deficit could increase to up to US$250 billion for this fiscal year, far exceeding last year's US$158 billion. After news about this package came out, the US stock market, as expected, went up immediately. Obviously, in terms of strengthening the confidence of investors, the package has already served its purpose.
In contrast, Taiwan's Executive Yuan has also proposed two job-creation bills hinged on government spending, hoping to make a special budget of NT$70 billion for the creation of more than 70,000 jobs. The goal is to reduce Taiwan's unemployment rate to below 4.5 percent and boost economic growth to at least 3.52 percent.
The proposal, however, has caused the opposition to question whether the Cabinet is trying to buy votes for the next presidential election. The issue of whether the plan should be funded by a special budget or by increasing the annual budget has become another topic of debate. Under the circumstances, one cannot help but have mixed feelings.
In the 1980s, Japan's economic prowess and performance took the world by surprise, winning a reputation of "Japan: No. One" The US was seen as an over-the-hill country, soon to be replaced by Japan and Germany.
Who would have thought that in the 1990s, as a result of the rise of Internet technology and knowledge-based economy, and the disintegration of Soviet Union and the communist regimes of Eastern Europe, the US would end up back on top?
However, in the final year of the 20th century, the absurdity underlying the over-inflation of the high-tech industries' market value based on a disproportional dream-capital ratio came to light, and the phenomenon of supply exceeding demand created by the market entry of large and cheap labor forces of developing countries such as China arose. Finally, the bubble burst. The US economy hit a peak than began to fall, trapping itself in a serious recession.
Moreover, the Sept. 11 terrorist attack seriously devastated the world finance center, ushering the global economy to rock bottom. However, it is noteworthy that the series of blows from inside and outside have incited a strong sense of patriotism among Americans. The two main parties, as well as the entire country, showed unprecedented unity in both the anti-terrorism campaign and the efforts to revive the economy, so as to strengthen the US' role as a world leader.
This is not an easy task in view of the strong individualism of the American people. This is not to mention the fact that racial issues have always been a thorny problem in the US. But one main reason that the US had been able to become the world superpower is the momentum created by a strong sense of national identity by Americans.
The situation is opposite in Taiwan. After the democratization and nativization campaigns, no strong sense of community was developed in the country to facilitate internal economic reforms and to strengthen resistance to external threats. Instead, very sharp internal conflict and polarization were triggered, slowing the momentum of economic growth.
With the economy on the decline, any proposals to revive it, no matter how well-intended, would more than likely be left out in the cold because of party bickering.
It would be the same regardless of which party is in power. Frankly speaking, this is exactly what happened in after the DPP came into power. At that time, Taiwan had encountered a global economic slowdown. As a result, to revive the economy became the top priority of the government.
The DPP may be inexperienced and lacking in financial and economic experts, as indicated by Kao Chin-yen (高清愿), chief executive officer of the President Group (統一集團): "The new government is much better than the old government. For example, the old government paid merely lip service to the proposal to extend rent-free treatment in the industrial zones for a long time, but the new government immediately acted on it."
Although the DPP is sincere about making reforms, it has made very little progress as a result of the restraints caused by party rivalries. An even more serious problem is that despite China's ambition, some individuals in Taiwan are suffering from conflicted national identity, lacking in a strong sense of patriotism.
Facing economic marginalization and sinization, revive Taiwan's economy requires effort in both political and economic fronts to deal with problems at their roots and create prosperity.
Leaders must have the determination and courage to come up with large-scale reform efforts, even if it means increasing deficits and taking out loans to increase public expenditures and public construction projects.
Favorable treatment must be extended to businesses that stay in Taiwan. Tax reductions are needed to stimulate consumption. On the political side, it is imperative to identify the relationship between the two sides of the Taiwan Strait as "foes," rather than "friends."
The US is the leader of the global economy. Yet, as soon as its economy begins to experience slow growth, the US government immediately proposes large-scale revival plans to rejuvenate its economy. Taiwan's economy has much more fragile roots and a more shallow basis, making it even more susceptible to outside clashes.
Now that Taiwan's economy has slowed, it is even more urgent to timely provide a cure before it becomes terminally ill. The determination and boldness of the Bush administration to revive the American economy is a best role-model for the DPP government in Taiwan.
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