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Politics : Formerly About Applied Materials -- Ignore unavailable to you. Want to Upgrade?

To: StanX Long who wrote (56513)	11/29/2001 12:12:58 AM
From: StanX Long	Read Replies (1) \| Respond to of 70976

Forget the stimulus bill ... At this point in the recession, it could do more harm than good. By Register Editorial Board 11/28/2001 dmregister.com The official word that a recession began last March should tell Congress something: The so-called economic-stimulus package is no longer a good idea (if it ever was). Indeed, if Congress caves into pressure from President Bush and rushes to pass the package, it's likely to do more harm than good. The timing would almost certainly be all wrong. If the decline began in March, it's obviously too late for Congress to avert a recession. And if this is a typical recession, it is mostly over already. It will probably end by spring - before many of the measures being contemplated by Congress could have any effect. But the measures could have an effect on the strength of the expected recovery - a negative effect. That's because most of the so-called stimulus is in the form of tax cuts - not temporary tax cuts to give a quick stimulus but permanent cuts that will reduce government revenues forever. Meanwhile, the war in Afghanistan and domestic anti-terrorism efforts are costing billions of dollars, and the expense may go on indefinitely. The combination of tax cuts and war expenses would almost guarantee a return to chronic budget deficits. Big federal deficits will cause an upward pressure on long-term interest rates. That will tend to weaken the recovery. The stimulus package is the wrong medicine at the wrong time.