Republicans See Stock Gains Resulting From Bush Stimulus Plan

by Carla Johnson, Investors Offshore.com

07 January 2003

Ahead of today's unveiling of President Bush's economic stimulus plan, many Republicans were predicting stock market gains as the result of an anticipated elimination of taxes paid by shareholders on corporate dividends.

Although it has been estimated that such a move could cost the US government £300 billion over 10 years, many believe that this would be a sacrifice worth making if it manages to turn the United States market around after three consecutive years of losses.

However, although, according to Reuters, stocks did jump in mid-morning trading on Monday 'as Wall Street cheered early details of U.S. President George W. Bush's economic stimulus package on hopes possible tax cuts would help boost corporate profits,' opinion is still divided as to the likely medium to long-term outcome of such a move, should the President choose to make it today.

Speaking to Reuters at the weekend, outgoing assistant Republican leader, Sen. Don Nickles observed that: 'If you encourage people to invest in the stock market you're going to have an increase in stock values. That will help everyone.'

However, Democrats (and some moderate Republicans) have condemned the proposal as a sop to the richer investor class of taxpayer, and many economists and media commentators have expressed doubts as to the degree to which such a move is likely to stimulate the US economy.

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