[VIEWPOINT]Hopefully, a quieter year in store

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[VIEWPOINT]Hopefully, a quieter year in store

George W. Bush has been president of the United States for just over a year -- an eventful year to say the least. President Bush enjoys unparalleled popularity in the United States. His popularity ratings have been the highest for any modern U.S. president, stemming principally from his decisive leadership in dealing with the terrorist attacks of Sept. 11. His ratings have not been matched by any other leader of any other nation.

But Mr. Bush has created anxious moments for the world, particularly here in Korea, with his statement that the United States would need to review the policy of his immediate predecessor, Bill Clinton, in dealing with North Korea. This seemed to be a serious setback for the gains achieved by the sunshine policy of President Kim Dae-jung, but Korea and the rest of the world breathed a sigh of relief when Washington indicated that the Bush administration would support Mr. Kim's initiatives. Mr. Bush would not engage the North Koreans with the same ardor demonstrated by Mr. Clinton, but dialogue would be pursued. We had some very nervous moments after the now infamous "axis of evil" speech. We were reassured during Mr. Bush's recent visit to Korea that the United States did not intend to invade North Korea and that talks were high on Washington's agenda. And Mr. Bush again expressed strong support for the sunshine policy.

Mr. Bush created another storm of controversy recently in and outside the United States with his announcement of special tariffs to protect the U.S. steel industry from imports. This was a serious blow to the proponents of free and open trade, and we are beginning to see the repercussions, with the Europeans announcing the imposition of the same tariffs on steel imports from the United States. The American Chamber of Commerce in Korea argued against the tariffs during our visit to Washington and we would have certainly preferred that Mr. Bush sought other methods to assist the U.S. steel industry, but the decision has been made.

One of the biggest successes of Mr. Bush's presidency is beginning to become evident: the recovery of the U.S. economy. Recent economic indicators are extremely positive and show a much greater surge in economic performance than expected. This recovery is due in very large part to the tax cuts implemented by Mr. Bush in the fall of last year. Once again, former President Ronald Reagan's economic theories seem to be working well, this time for Mr. Bush and the U.S. economy. The tax cuts have put more money back into the economy in a very broad and systematic manner, helping to reduce inventories and spurring new production.

Unfortunately, tax cuts will not work for every economy. The Japanese government attempted to spur domestic consumption by providing additional income to Japanese citizens, but pessimism was so strong that the Japanese simply put the money in savings deposits, widening the Japanese government's deficit.

As Korea's deputy prime minister pointed out in his speech in New York last week, the Korean economy is also doing quite well. Its reform policies have been extremely successful. Notwithstanding the impressive performance of the Korean economy, perhaps we could take an additional lesson from Mr. Reagan's economic theory as implemented by Mr. Bush. Domestic confidence is strong and Korean consumers have been one of the principal engines for the recovery. Even though the savings rate for Korea remains healthy, Korean consumers are spending money, boosting the nation's gross domestic product. Perhaps this is the time to introduce tax cuts to spur further growth. There may be no better moment to introduce such a measure, which would contribute significantly to economic growth and boost the per capita income of all Koreans. The increase in economic activity would also boost tax revenues so that the government's budget would not suffer. Consequently, the motivation to avoid the duty to pay taxes would be diminished, thereby making Korea a more transparent society.

We are pleased to see the United States recovering more strongly than expected. As the recovery takes hold, let's hope that Mr. Bush gives us a year quieter than his first one in office.


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The writer is president of the American Chamber of Commerce in Korea.

by Jeffrey Jones

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