THERE IS AN OLD POLITICAL SAYING: "It is better to be lucky than good." This week, President Bush was both: He gave a well-received acceptance speech to the Republican convention, and now he gets a jobs report that suggests his economic recovery program is working.

In his speech last night, the president laid out his vision for America's economic future. If re-elected, he will make permanent the tax cuts he introduced to fight the recession, and will reform the tax structure so as to lighten taxes on dividends and earnings. That means that taxes on consumption will have to go up. The word from insiders working on these reforms is that detailed plans for a shift to some form of consumption tax have already been drawn up.

Senator Kerry has a far different plan for the economy if he takes over the White House. He would repeal the tax cuts for families earning more than $200,000, and return the rate on top incomes to 39.6 percent from the Bush-created level of 35 percent. He has also promised to raise dividend and capital gains taxes on high earners.

This is merely one manifestation of a very profound difference between Bush and Kerry as to the role of the state in the life of the individual. Kerry believes that the government can spend a good deal of individuals' money better than can those who earn it. He sees a range of social needs crying out for funding, and has a long history in the Senate of raising taxes and supporting extensions of the welfare state.

Bush, who restated his creed of compassionate conservatism--read, big-government conservatism--believes he can fund his prescription drug, education, and other "compassionate" programs by cutting taxes so as to increase incentives for entrepreneurs and workers to take greater risks and produce more, thereby increasing tax revenues. He wants to turn America into an "Ownership Society" in which workers are free to invest a portion of their Social Security accounts in stocks to increase the skimpy 1.5 percent they now earn on those government retirement accounts.

Kerry would rather increase taxes to keep the national pension fund solvent. He proposes to raise the current ceiling on income subject to payroll taxes from $87,900 to $120,000. This, says Harvard professor Martin Feldstein, will so drastically increase marginal tax rates that incentives to work will be reduced, and little new revenue will flow to the Treasury.

Bush, determined to keep his free trade agenda intact, would create $3,000 reemployment accounts for workers to use as they wish to retrain if their jobs disappear overseas; Kerry hints that he will re-examine the existing trade agreements (for which he voted), change the tax structure in ways that he claims will stop the outsourcing of jobs, and find ways to satisfy his trade union backers' demand for greater protection from foreign competition.

The rivals' approaches to health care also reflect the differences between Bush's plan to give individuals a greater say in their own affairs, and Kerry's belief in a larger role for government. The president wants to give individuals tax breaks to enable them to set up their own Health Savings Accounts, while Kerry wants to use the revenues from higher taxes on "the rich" to provide a variety of government subsidies, especially to low-income workers and their families. Bush's plan would cost about $100 billion, Kerry's over six times as much.