Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Politics : PRESIDENT GEORGE W. BUSH -- Ignore unavailable to you. Want to Upgrade?

To: Little Joe who wrote (129208)	2/26/2001 3:24:39 PM
From: Zoltan!	Respond to of 769667

Economists back tax cut to reverse the Clinton-Gore slide: February 26, 2001 -------------------------------------------------------------------------------- Economists See Higher Recession Risk, Expect Further Cuts of Interest-Rates Dow Jones Newswires WASHINGTON -- An influential panel of economists said the near-term outlook for the U.S. economy has darkened, making further interest-rate cuts by the Federal Reserve more likely.... ....The economists also lent their support to Fed Chairman Alan Greenspan's controversial decision to drop his long-standing opposition to tax cuts this year, saying that the decision was economically sound. The NABE said that 78% of the 34 economic forecasters it polled this month believe that Mr. Greenspan was right to advocate tax cuts in recent testimony to Congress. They said "budget circumstances have changed so that phasing in tax cuts is preferable to paying down all publicly held Treasury debt and subsequently accumulating private securities." The NABE panel said the deepening economic downturn isn't a compelling reason by itself for tax cuts, however. A plurality of the panel members, 42%, said it takes fiscal stimulus as well as lower interest rates to lift an economy out of recession. An additional 39% said fiscal stimulus shouldn't be used to revive the economy. And 14% said tax cuts are appropriate to revive growth. Most of the panelists said tax cuts are needed not for short-term reasons, but for the long-term health of the economy. They endorsed Mr. Greenspan's argument that U.S. budget surpluses are building up so rapidly that the government could soon find itself free of debt and forced to consider investing its revenues in private assets such as stocks. Mr. Greenspan said such investments could be tainted by politics, and he urged Congress to cut taxes "sooner rather than later." The NABE said only 19% of the forecasters it surveyed believed that Mr. Greenspan was wrong. Those forecasters said the government could let its budget surpluses build without risk to the economy. One third of them suggested that the surpluses could be maintained in cash or substitutes, and another third said the excess revenues could be invested in bonds issued by government-sponsored agencies such as Fannie Mae and Freddie Mac. Only 4% said the revenues should be invested in stocks. interactive.wsj.com