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U.S. Economic Challenges

President George W. Bush says, “It's clear our economy has slowed.” But, Mr. Bush says, “the good news is, we anticipated this and took decisive action to bolster the economy.” The U-S Congress passed, and President Bush signed, an economic growth package giving tax rebates to American workers and tax incentives to business. And the Federal Reserve, the United States’ central banking system, has cut interest rates and has supplied financing to rescue troubled investment companies. Mr. Bush says this will help the economy grow:

"In the long run, we can have confidence that so long as we pursue pro-growth, low-tax policies that put faith in the American people, our economy will prosper."

Mr. Bush says the U.S. needs to continue to expand free trade around the world:

“During this time of economic uncertainty, when consumer spending and investment is slowing down, it’s important to understand the role trade has made for our economy. Last year exports accounted for more than 40 percent of our total growth."

Mr. Bush says he wants to send a clear signal to America’s trading partners:

“The United States of America will continue to trade, not shut down trade.”

U.S. exports have been helped by the relative weakness of the dollar, which makes American goods less expensive when paid for in stronger foreign currencies. But the weak dollar also threatens the U.S. economy with inflation, as the cost of imports, such as oil, soars. U.S. Treasury Secretary Henry Paulson says that a goal of U.S. monetary policy is to keep the dollar from losing value:

"We have a strong dollar policy. It's very much in our nation's interest."

Mr. Paulson says that though “Our economy has ups and downs,” the long-term fundamentals of the U.S. economy are strong.