Twenty
years ago, President Ronald Reagan cut taxes and
launched a big American military buildup. Now President
Bush appears to be setting out on the same course,
pushing tax reduction and planning to increase
the Pentagon budget by $120 billion over the next
five years -- $48 billion for next year alone --
to a total of $451 billion in 2007.
As
details of the planned military expansion have begun
to emerge
in Washington, they echo other suggestions that the
Bush Administration will not hesitate to act by itself
in dealing with international problems ranging from
terrorism to the alleviation of world poverty. That
possibility, in turn, has raised the specter of a new
Western disunity, even in prosecuting the "war
on terrorism."
Statements
made at the World Economic Forum by Secretary
of State Colin Powell and Secretary
of the Treasury Paul O'Neill appear to reflect
an Administration "go it alone" attitude.
O'Neill strongly defended the U.S. decision
not to support further financial aid to Argentina,
and suggested that the Administration would
follow the same policy whenever it deemed
a "bailout" unwise. Powell seemed
cautiously to support Bush's threats of military
action against what the President called "an
axis of evil" - Iran, Iraq and North
Korea.
Both
speakers aroused a mixture of skepticism
and rejection
among Forum goers. Lord Robertson,
the secretary-general of NATO, openly suggested
that the European alliance might not support
U. S. military action against Iraq unless "compelling
evidence" of that nation's participation
in the Sept. 11 terrorist attacks were produced.
In Washington, where the foreign ministers
of Britain and France, Jack Straw and Hubert
Vedrine, were talking with U.S. officials,
they echoed Lord Robertson's warning. Straw
also said that Britain would continue to
work with the reformist element in Iran supposedly
led by President Mohammad Khatami - a movement
President Bush appeared to downgrade in his
tough talking State of the Union speech.
Most of the response to the possibility
of a more unilateral U. S. approach to world
problems has been in international terms.
Sure to arise, however, as the Administration's
budgetary and diplomatic plans become clearer,
is the domestic result of a policy combining
a major military build-up with massive tax
cuts.
In the same five-year period projected for
military expansion, Bush's tax reduction
plan, totaling $1.35 trillion over 10 years,
would begin to take substantial effect. In
his State of the Union message, the President
urged Congress to make permanent these large
reductions, passed in 2001 to take effect
over a decade. A few Democrats - notably
Senator Edward Kennedy of Massachusetts --
already have started to talk about repealing
some of the cuts, in view of the virtual
disappearance since Sept. 11 of what once
appeared to be a large federal budget surplus.
When
President Reagan pushed through sizeable
tax reduction
in 1981, then followed with
a military build-up even larger than that
now contemplated by President Bush, one result
was massive federal budget deficits "as
far as the eye can see." Another, necessarily,
was a reduction in federal spending on domestic
programs. Some regarded these reductions
as the planned results of planned deficits.
Partisans still argue as to whether the
long period of deficits combined with increased
military expenditures might have been a cause
of the U. S. economic expansion and runaway
prosperity of the 1990s. It's undisputed,
however, that after the Clinton Administration
took office in 1993, the deficits gradually
came under control; and the prospect, until
recently, was for years of budgetary surpluses.
That prospect has vanished, owing to an
economy that began to decline in early 2001,
because of the unexpected costs of recovery
from the Sept. 11 terrorist attacks, and
due - as many Democrats believe - to the
long-term effects of the Bush tax cuts enacted
last year.
In
his remarks at the World Economic Forum,
Secretary
Powell spoke forcefully about the
need for the developed nations to alleviate
world poverty. "Terrorism really flourishes," he
said, where "poverty, despair and hopelessness" are
rampant, and "people see no future." The
West, he suggested must "show people
who might move in the direction of terrorism
that there is a better way."
This
ringing statement has a rather depressing
ancestry;
Powell's exact words used to be
the rallying cry of those who believed communism "flourished" primarily
in areas of "poverty, despair and hopelessness." If
those facts of world life now breed terrorism,
the glum inference must be that decades of
Western development aid have not had much
effect.
That
conclusion is supported statistically by
a recent
World Bank study that found 2.78
billion people, nearly half the world's population,
still living on less than $2 (U.S) a day.
And Secretary O'Neill told the Forum that
in the past half-century "hundreds of
billions have been spent in the name of economic
development" by the industrialized nations
-- with many "major recipients still
not showing strong evidence of positive change."
President
Gloria Macapagal Arroyo of the Philippines
warned against misdirecting such
efforts. She said the resources of the coalition
of nations conducting the "war on terrorism" (which
has spread to her nation) "could have
gone into the fight against poverty."
The problems nevertheless seem obvious.
Political support in the U. S. for foreign
aid was already at a low point before Sept.
11 and will not increase in a time of deficits;
so the public unity displayed in the war
on terrorism is hardly to be expected in
any forthcoming war on world poverty. Wealthy
nations need to provide their voters with
evidence of progress and rising living standards
in poorer nations if they are to offer development
aid at an effective level. And despite their
aid efforts, rich nations often erect barriers
to poor nations' development - trade subsidies,
tariffs, and restrictive trade regulations.
Nor are all needy countries free of responsibility
for their continuing poverty. Some are not
politically organized or are too corrupt
to take advantage of development aid, or
to allocate and use natural resources properly.
Low educational and health standards often
leave potential workers unable to hold modern
jobs. Hasty collaboration with some Western
countries and multinational firms have resulted
in low wages, environmental damage, worker
exploitation, and removal of protective trade
regulations.
For
all these reasons, the raising of living
standards
and the alleviation of poverty
in the world - whatever its effect on terrorism
-- will require more than Western good will
and cash. It will not be easy to meet President
Arroyo's demand that the coalition now fighting
terrorism should ultimately launch a "global
campaign" for economic development;
and it would be even more difficult for such
a campaign to succeed.
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