The ratification and signing of the North American Free Trade Agreement was the highlight of the economic policies implemented in the first term of Bill Clinton’s presidency. The second most important step was expansion of the Earned Income Tax Credit.
First Phase of Clinton's Presidency Clinton’s fist term in the office of President came at a time when the American economy was enjoying an upswing of sorts towards the end of the George H. Bush era. Clinton successfully transformed it into a veritable economic boom for the US near the end of his first term. This boom would continue till about the very end of his second term in 2001.
Clinton's Budget Policy An overwhelming budget surplus, ranging to the scale of the $10,000 bn was the biggest legacy of the Clinton era. However, the mode of utilization of that surplus also became a potent bone of contention among the Democrats and the Republicans. The question was how that surplus was to be utilized, for tax cuts or reduction of national debts.
Basis of Clinton's Economic Policy Clinton’s economic policy was based on a decision to reduce debts rather than cut taxes to bolster USA’s economic growth. By following this policy faithfully even in the face of strong Congressional opposition at times, Clinton succeeded in putting the economic condition of US in its best shape for decades towards the end of his first term in 1996.
Clinton's Role in North American Free Trade Agreement (NAFTA) North American Free Trade Agreement (NAFTA) was conceptualized by George H. Bush along with Canadian Prime Minister Brian Mulroney and Mexican President Carlos Salinas de Gortari. It was visualized as a tripartite free trade treaty, with an objective to form a North American trade bloc.
Clinton made the legislation of the bill one of his priorities right from the time he took office. It was not, however, without opposition from within the Democratic fold as well as from Republican protectionists. There were large scale protests and oppositions in Canada and Mexico as well. However, Clinton successfully negotiated the bill through the Congress at 234 against 200. It was turned into legislation and signed by President Clinton on January 1, 1994.
Clinton's Role in NAAEC (North American Agreement on Environmental Cooperation) and NAALC (North American Agreement on Labor Cooperation) Clinton successfully brought about the inclusion of NAAEC (North American Agreement on Environmental Cooperation) and NAALC (North American Agreement on Labor Cooperation) within the terms of NAFTA. The former endeavored to introduce clear sets of environmental regulations. NAALC was an agreement that laid down a common foundation of ways to deal with labor related problems in all three countries. It also endeavored to enhance cooperation among labor unions of all three countries.
Impact of NAFTA The impact of NAFTA is ambiguous. Some have thought it to be much oriented towards the industrial elite at the behest of common labors and agriculturists. Others have contended that it was solely responsible for amelioration of poverty to a great extent in Mexico after dire economic crisis, by increasing real income scales.
Expansion of Earned Income Tax Credit Bill Clinton’s second important legislation during his tenure as the president was the expansion of the Earned Income Tax Credit. With this legislation, Clinton extended the scope of what is considered to be the greatest anti-poverty tool in the US.
Ever since its unification as a nation state in 1932, the Kingdom of Saudi Arabia has been an oil-dominated economy. Most improvements and setbacks in its economic and social indicators can be invariably traced to the ups and downs of the oil market.
While that kind of volatility in revenues is unhelpful, dependence on petroleum would not ring too many alarm bells if it was sustainable. But it is not. Oil and the revenues it generates – 90% of all government income – will dry up at some point in the future, and the economy could collapse unless it diversifies.
Professor at Columbia University. Recipient of the Nobel Memorial Prize in Economic Sciences in 2001 & the John Bates Clark Medal in 1979. Author of "Freefall: America, Free Markets", "The Sinking of the World Economy", "Globalisation and its Discontents" & "Making Globalisation Work".
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