A few quick highlights of the coverage and developments in the world of economic stimulus chatter. Funny how even two months ago the word “stimulus” was only heard in other contexts. Which we’ll let you supply.
: “Fed Chairman Backs Stimulus
Bush to Announce ‘Principles’ Today; Congress Works on Bipartisan Proposal”
McCain proposed a stimulus plan that would lower the corporate tax rate from 35 percent to 25 percent, allow expensing of equipment and technology investments and establish a permanent research and development tax credit.
The current tax code — designed to discourage capital accumulation and projected to collect rising levels of revenue in increasingly complex and distortionary ways — does need serious reform. But what we’re getting instead from politicians and economists are legislatively challenging, economically questionable and politically motivated policies to address a potential problem best handled by the Federal Reserve.
If the U.S. is capable of talking itself into an economic downturn, we may be on the cusp of the first recession in history caused by a bad mood. More likely, though, the economic news will turn less dour than many people now expect, spirits will brighten, and we’ll get through this soft spot with the durable economic expansion remaining intact.
Hope we’ve stimulated discussion.
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