NCPA - National Center for Policy Analysis

War Measures Include Economic Recovery

September 12, 2001

Policy makers must understand that after the terrorist attacks in New York and Washington we are at war, and war changes everything, including policies, says Lawrence Kudlow, economics editor of National Review Online. We must now embrace war policies. Democrats and Republicans alike must understand how important it is to maintain our defenses.

The national security structure has eroded steadily in recent years, as have our intelligence systems. The response should be strategic defense measures and a general technological rebuilding of our defense capabilities, says Kudlow. Furthermore:

  • To backstop national security recovery we must take aggressive actions to stimulate economic recovery -- something Ronald Reagan understood 20 years ago when he argued U.S. economic decline in the 1970s stimulated Soviet expansionism and adventurism.
  • The U.S. failure to recover from the Depression -- where even as late as 1940 unemployment was 14.6 percent -- created an image that the economically-plagued U.S. would be a weak player on the world political scene.
  • Today, substantial tax cuts on individuals, businesses and capital investment should be put in place to aid economic recovery by reducing production and investment costs.
  • The Federal Reserve should substantially increase the volume of bank reserves to reliquefy the financial system and the economy.

Preserving freedom and democracy is a national security goal, but it is an economic security goal as well, experts argue.

Source: Larry Kudlow, "The Price We Must Pay," National Review Online, September 11, 2001.

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