The Rubin Communique-World's economic prospect may be brightening.
Jim:
See if this is worth anything.
===========================
Source:Bloomberg
Top News
Wed, 21 Oct 1998, 9:40pm EDT
Treasury Secretary Rubin Says World Economic Outlook May Be Brightening
Treasury's Rubin Says World Economic Outlook May Be Brightening
New York, Oct. 21 (Bloomberg) -- Recent developments offer
cause for optimism about the world economic picture, even though
there are no ''magic wands or easy answers'' to solve the global
slowdown, U.S. Treasury Secretary Robert Rubin said.
Rubin, speaking at a Concord Coalition dinner, cited
Congress' final approval today of additional money for the
International Monetary Fund and Japanese lawmakers' passage this
week of banking legislation. At the same time, further evidence
has surfaced that Thailand and South Korea are making economic
progress, Rubin said in the text of an address.
''Recovery will take time, the road may be bumpy, and there
are great challenges for all to meet, but I believe we are on the
right track,'' Rubin said.
The fiscal 1999 U.S. budget, passed today, includes $17.9
billion in additional funds for the IMF. The U.S. appropriation
clears the way for contributions from the rest of the IMF's 182
members. That should add about $90 billion to the lender's
reserves from an estimated $6 billion to $8 billion today,
helping restore investor confidence, Rubin said.
Japan's new banking legislation will enable that country's
financial institutions to deal with 77 trillion yen ($660
billion) in bad and risky loans. Once those loans are wiped off
the books, bank lending should pick up, helping the country
recover from its deepest recession in 50 years.
''The key is to implement it quickly and strongly and put in
place appropriate fiscal measures that will promote demand-led
growth,'' Rubin said.
Fiscal Discipline
In this country, U.S. policymakers must be ''diligent'' in
keeping the nation's fiscal house in order, or face the wrath of
investors, he said.
''The dynamics of today's global markets greatly heighten
the importance of fiscal discipline,'' Rubin said.
The Treasury secretary praised President Bill Clinton's 1993
budget, which raised taxes and tightened caps on domestic
spending that were approved under the Bush administration. Rubin
called the legislation ''the indispensable factor'' in achieving
the nation's first budget surplus since 1969. Clinton said on
Sept. 30 the administration expects a $70 billion surplus for
fiscal 1998.
Rubin, who didn't mention the balanced budget agreement
passed by the Republican Congress last year, said the Clinton
administration's economic strategy going forward would have four
parts.
The first is addressing the long-term solvency of Social
Security. ''Soon after the turn of the year, the president wants
to work with Congress to produce a bipartisan plan to put this
program on a sound footing for the long term,'' Rubin said. ''We
must not flag in our commitment to it.''
At the same time, Rubin said, the country must work to
improve education, ''especially the public school system,'' and
deal with the ''tremendous social costs and loss of
productivity'' among those in the nation's inner cities who still
haven't found work.
Finally, the U.S. must remain ''deeply engaged'' in
providing leadership in international economics, Rubin said. The
administration, he said, will push for open markets and trade
liberalization, growth and reform in developing nations, and ways
to limit the damage in future international economic crises.
He called on Congress to join the effort, warning against
developing isolationism.
''We are the only major country in arrears to the United
Nations, we still lack the authority to negotiate new trade
agreements, even though expanding trade is very much in our
interest, and protectionist pressure seems to be increasing,''
Rubin said.
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