October 24, 2001

The House passed an economic

The House passed an economic stimulus bill that relies on business tax cuts to spur growth. This makes sense because this economic downturn (dare I say recession?) is caused by a major reduction in business capital spending. Firms aren't buying new machines, computers, and other equipment. The effect can most easily be seen in the depressed stock prices of telecom equipment giants Nortel and Cisco. A tax cut focusing on boosting capital spending may spur growth, but there should have also been an accelerated reduction in across-the-board tax rates. That would provide a greater chance for sustained economic growth. In a time of war, the last thing the country needs is a sustained economic downturn. Economic uneasiness combined with attack anxiety could sway public opinion away from the sustained war that's needed. Just like in World War II, the U.S. will win the war on the economic front as well as the military front.

"House Passes Stimulus Plan Favoring Business Tax Breaks"

"Business Tax Cuts Crucial in a Slowdown"