As expected, US President George W. Bush was roundly attacked by the Democratic Party after he presented his 10-year, US$600 billion economic stimulus plan. The Democratic Party is the minority party in both the House of Representatives and the Senate, so no matter how they attack Bush's plan, they probably won't be able to do anything about it.
A total of US$300 billion of the planned US$600 billion will go toward the abolition of the tax on stock dividends. The White House's logic is that the tax on dividends is a dual tax.
By abolishing it, they hope to set loose the stock market, stimulate business investment and ultimately increase consumer spending.
The Democrats have charged that the White House plan will incite "class warfare" by benefitting only the rich, thereby giving incentives to the wrong people. They say that even if the effects on the securities markets are positive, the labor market won't benefit.
Besides criticizing the administration, the Democrats have proposed their own US$136 billion plan aimed primarily at lending assistance lower and middle-income households. They advocate across-the-board tax refunds and extensions of unemployment benefits in order to achieve the goal of short-term stimulus and long-term balance without deferring problems for the future by means of an enormous budget deficit.
When Ronald Reagan was president, he carried out tax cuts on an almost unprecedented scale in accord with the theories of supply-side economics. By doing so, he spurred a heated debate about fiscal policy. Since Bush's stimulus plan is patterned after Reagan's policies, we can expect another round of debate on the matter.
In contrast with the US debate on fiscal policy, bickering in Taiwan between the administration and the opposition over the Cabinet's plan to reduce unemployment is utterly lacking in theoretical content. The reasons for the petty squabbles are superficial and childish. They amount to nothing more than verbal sparring, unworthy of the term "debate."
In both Bush's US$600 billion plan and the Democrat's US$136 billion plan, every dime is clearly accounted for. But Taiwan's ruling and opposition parties act like hawkers at a bazaar. Everyone adds to or subtracts from the budget at will. There no theoretical basis for their actions and even their arithmetic is flawed.
Although the KMT's financial policy advisers have the most administrative experience and the PFP boasts the academic legislators most steeped in fiscal theory, these two opposition parties have done nothing but engage in mud-slinging.
They may appear formidable but in the end they fail to demonstrate any of their administrative experience or theoretical sophistication. They pedantically criticize minor points of the government's plan and fail to supply any concrete, viable alternatives.
The KMT has been particularly remiss. Although daily press conferences are called to lambast the ruling party, we never see party leaders bringing forward their fiscal policy advisers to calmly face the public and explain their plan line by line for rescuing the economy.
If the party, which claims to be in the process of transforming itself, is really doing nothing more than improving its leaders' ability to criticize others while throwing away its own hard-earned administrative experience like so much garbage, the transformation would be better left undone.