Most Americans recall how Governor Bill Clinton of Arkansas won the 1992 presidential election with the slogan "It's the economy, stupid". President George Bush may have won the Gulf War, but he did little to convince voters that he knew how to tackle the economic recession and he lost the White House.
Now eight years later George Bush jnr is trying to win back the White House for Republicans at a time when the economy is booming and candidates are thinking up the best ways to spend the huge budget surpluses.
It should be a dream time for the Republican candidates, Governor George Bush of Texas and Senator John McCain of Arizona, as the party economic philosophy is usually "tax cuts, tax cuts" and about keeping the spare money out of the hands of Washington.
But it should also be a dream time for the rivals for the Democratic nomination, Vice-President Al Gore and former New Jersey senator, Bill Bradley, as the surpluses can go to fund classic Democratic programmes in education, urban renewal, health and the environment.
The way things are going now, there should be almost $2 trillion (€2.06 trillion) of a surplus over the next decade and that is not counting the surplus that is mounting up in social security contributions that go to fund the pensions of retirees after 65.
Federal Reserve Chairman, Mr Alan Greenspan, warned last week, however, that ambitious schemes to spend the surplus are premature when no one can be sure how big it will be in 10 years time. Better to use at least some of it to start paying off the $5.6 trillion national debt, Mr Greenspan advised, echoing President Clinton's policy which aims at elimination of the debt by 2015.
But he is not standing for election and the four main candidates have different ideas on how to spend the mounting non-social security surplus which will appeal to voters.
Governor Bush wants to give most of it back to the taxpayers by cutting taxes by about $1.3 trillion over 10 years. Under his plan everyone would get a tax cut as he would reduce all the marginal rates. He would also reduce the so-called "marriage penalty" and phase out estate taxes.
This is classic Republican philosophy but it also means that the rich will benefit much more than the low-paid. A research group, Citizens for Tax Justice, estimates that more than one-third of Mr Bush's tax cut will go to the wealthiest 1 per cent of taxpayers - those with incomes of $319,000 and more. The bottom 60 per cent with incomes of less than $39,000 would get only 11 per cent of the benefits.
But Mr Bush sees nothing wrong with this. "If you're going to have a tax cut, everybody ought to have a tax cut," he says breezily.
His Republican rival, Mr John McCain, has sensed that the party supporters in these prosperous times are less interested in tax cuts than in keeping the social security and Medicare systems for the retired solvent. The babyboomers of the 1950s are not that far from retirement after all.
Hence McCain is proposing a $500 billion tax cut over 10 years or half that of the Bush proposal. McCain would also widen the lowest 15 per cent income tax band, help families, and pay for some of the tax cuts by closing off corporate loopholes known colloquially as "corporate welfare". He would use the remaining surplus to pay down the national debt.
The Democrats are less generous with the tax cuts than the Republicans and would use them to target specific groups. Al Gore would direct about $300 billion in tax cuts to the middle and lower classes in the form of credits for education and retirement savings. Gore would devote the rest of the surplus to protecting the Medicare system for retirees and gradually extending health insurance to the 45 million Americans who are uninsured.
Bill Bradley was a leading figure in the overhaul of the tax system when he was a senator in 1986, but has been vague about his tax proposals in his quest for the presidency. He would use most of the surplus to introduce a universal healthcare system which would incorporate the present Medicaid system for the poor.
Bradley would also close corporate tax shelters, increase the minimum wage and channel more money into training teachers.
Free trade and taxes on Internet electronic commerce are two other issues that can divide Republicans and Democrats.
Republicans are traditionally free-traders. They have supported the North American Free Trade pact linking the US, Canada and Mexico. They also favour the entry of China into the World Trade Organisation which will mean legislation by Congress to give China permanent most-favoured-nation treatment instead of through annual votes as at present.
But Vice-President Gore has been wooing the electoral support of labour unions who are unhappy with NAFTA and oppose China's entry into the WTO unless it agrees to minimum labour standards. Mr Gore has told the unions he supports them on this but was then forced to tell employers that he supports the Administration's policy on China entry into the WTO which does not incorporate compulsory labour standards.
The taxing of E-Trade over the Internet is a sensitive issue in the US because the present moratorium or ban on taxes deprives the states of sales tax revenues and discriminates against non-Internet retailers.
Mr McCain favours a permanent moratorium against Internet taxes while Bush, conscious of the problem for the states of lost tax revenue, would extend the present one to 2004 while a compromise is worked out.
Both Democrats would be closer to Bush than McCain in backing a temporary moratorium. Both want to support expansion of online commerce as the trend of the future but without damaging traditional businesses and leaving the states short of the funds to pay for education and other essential services.
A popular move would be to abolish all sales taxes at states' level and replace them with federal grants from the burgeoning surpluses.
Long may they last.
