Focus Point - Economic StimulusCommentary by Pete du Pont
October 23, 2001
I'm Pete du Pont with the National Center for Policy Analysis. Historically, economists favored public spending on new programs for short-term stimulus. But it takes a long time to set up, and rarely is implemented in the same places where unemployment is high.
Plus, any spending program enacted now probably won't be effective until long after the economy's revived -- and could be inflationary to boot. Tax rebates aren't the answer either, because they don't change incentives for work, saving or investment.
There just aren't many things that can guarantee the quick response we need. But cutting taxes for businesses is one thing government can do that will actually stimulate economic growth in the near term. If businesses could write off new investments more quickly, through shorter depreciation schedules, they would act the minute they were certain the legislation would pass. And when businesses open new factories they create new jobs, and that stimulates growth in the short and long term.
Sure, some will paint this as a giveaway to business. But it's important, and we need it now for the entire economy.
Those are my ideas, and at the ncpa we know ideas can change the world. I'm pete du pont. Next time, saving social security Texas style.