Saturday, January 19, 2008

George W. Bush, the president of the United States has suggested an economic growth package that could be worth almost 1% of the United States’ GDP (the US GDP is appoximately US$15 trillion). The package is expected to come in the form of tax cuts.

In a speech which took place yesterday Mr.Bush said that the economy is an area of “real concern,” to the US government. He added that the US “economy is still creating jobs, though at a reduced pace.”

Democrats want the tax refunds to cover payroll taxes paid by lower-income groups and be combined with more unemployment benefits, food stamps and federal aid to states. It warned against bundling proposals to make Bush’s first term tax cuts permanent with the stimulus package, and the Bush administration has separated the two in this proposal.

When announcing the proposal George Bush said that “as Congress considers such a plan, there are certain principles that must guide its deliberations: This growth package must be big enough to make a difference in an economy as large and dynamic as ours — which means it should be about 1 percent of GDP.” He added that “this growth package must be built on broad-based tax relief that will directly affect economic growth — and not the kind of spending projects that would have little immediate impact on our economy. This growth package must be temporary and take effect right away — so we can get help to our economy when it needs it most.” He also added that he believed the package “must not include any tax increases.”

In the speech George Bush also made it clear that he believes the package should be passed through congress quickly. He said that his belief was that by passing the package through congress quickly would “provide a shot in the arm to keep a fundamentally strong economy healthy. And it will help keep economic sectors that are going through adjustments, such as the housing market, from adversely affecting other parts of our economy.”