US President George W. Bush will try to squash rising scepticism over his US$674-billion antidote to a slow, jobless economy when he addresses the nation tomorrow, analysts say.
He faces an daunting task, however, if he is to avoid the trap that snatched a second presidential term from his father: winning a war in the Middle East but losing people's trust on the economy.
The big unknown, economists say, is Iraq. A quick victory may cure US businesses' reluctance to expand. But a protracted war or even an agonizing wait for possible invasion may drip poison into the economy.
"Whether or not he is re-elected president will, to a large part, depend on the depth of any recovery on employment," said Moody's Investors Service chief economist John Lonski.
The US leader's State of the Union address, which comes two years ahead of presidential elections, would emphasize yet again the need to create jobs, he said.
"That will figure prominently," Lonski said.
Bush faces a tough audience.
US firms axed 101,000 jobs in December, and the unemployment rate is stuck at 6 percent.
Americans increasingly disapprove of Bush's handling of the economy, a survey by the Wall Street Journal and NBC News found last week, with 61 percent doubting his 10-year stimulus package would do much.
The package provides extra job training, but its key plank is the abolition of taxes paid on share dividends, provoking criticism that it basically helps the rich.
According to the Journal/NBC News poll, by a 59-to-31-percent margin, respondents say the Bush economic package would "benefit mostly the wealthy" rather than "benefit all Americans equally."
Businesses are holding up plans to expand investment.
"Geopolitical uncertainties have increased risk aversion at the cost of business expansion, which affects both capital spending and employment," Lonski said. "The uncertainties could linger around for another year, which would limit US economic growth."
The key laggard in the economy, however, has been employment, said Sal Guatieri, Chicago-based economist at the Bank of Montreal.
"The main concern at the moment is the possibility of a protracted conflict in Iraq that would further undermine business confidence and send oil prices shooting higher, which of course would raise business costs," he said.
"Both those factors would discourage employment."
Guatieri, who forecast growth this year of 3 percent on an annual basis, noted that Bush's economic package had been criticized because much of the stimulus would be delivered in early 2004, when people normally would pay taxes on their dividends.
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