CATEGORY: EDT Editorials
Editorial, Tuesday, Oct. 28, 1997
The stock market dipped and tumbled Monday even as one of the nation's leading newspapers reported that a major indicator of economic strength the federal budget deficit has dropped to its lowest level in more than 20 years.
The New York Times, in a front page story, reported that the deficit is down to $22.6 billion reduced by a strong national economy and increased tax revenue. The figure is equal to about 1 percent of the national economy.
The stock market's gyrations shouldn't be taken as evidence that the deficit isn't important but that investors in a sustained bull market want a reason almost any plausible reason to let off steam and take some profits. Upheaval in Southeast Asian stock markets seems to have provided the plausibility many investors have been seeking.
The diminished deficit which could go up again as recent tax cuts take effect remains important and could provide the power to send the market climbing when investors decide it's time. The longer economic view, as background strength for the lower deficit, shows no sustained recession in almost 75 years when the economy has been strong, unemployment and interest rates low, and the deficit under control.
The administration and Congress together have moved steadily toward the kind of spending restraint that can balance the budget early in the next century. That should serve as strong reassurance for investors looking for confidence in the long-term American economy.
China, U.S. relations go beyond trade
Jiang Zemin, China's ultimate leader, and President Clinton meet Wednesday at the White House, the first top-level American-Chinese dialogue since the Tiananmen Square massacre in 1989.
The meeting comes into focus against a background of opposition in the United States stemming from an unlikely coalition of religious conservatives and traditional political liberals focused on various kinds of human rights abuses in China. No one disputes the accuracy of claims that China represses dissent and religious expression. Those issues are important, and leaders in both parties should press Jiang about them.
Other issues, however, also play into the United States' relations with the world's most populous nation a country that soon is expected to surpass Japan's economy in size and whose military power in sheer weight of numbers can't be ignored.
Taiwan, until 25 years ago, the only "China" recognized diplomatically by the United States in the Cold War era, remains a serious and important point of contention. The United States, in recognizing (during Republican President Richard Nixon's tenure) the People's Republic of China as the legitimate Chinese nation, reduced Taiwan's importance. China claims Taiwan as a part of its nationhood, a right the U.S. acknowledges. Yet the U.S. remains opposed to any Chinese action that would force Taiwan to accede to that claim. The dispatch of American naval task forces has backed up U.S. resolve on that point.
The summit also probably will include some discussion of Korea especially the future of North Korea and its internal stability. China is North Korea's major ally, which putsit into direct line for confrontation with the United States should another round of hostilities break out on the Korean peninsula.
The summit will be brief (about 90 minutes) under the official schedule, but it clearly is essential in keeping a peaceful balance Asia.
The Chinese still must go a long way to establish themselves as democrats. The best policy for pushing them even if slowly toward internal freedom and tolerance, is engagement on the broadest possible range of issues in which we have common external interests.
A bipartisan majority of leaders has agreed on that course for 25 years; it's one we should maintain.