More Tax Cuts?

Given the uncertainties in the current U.S. financial market, President Bush is considering an economic stimulus package to help out many Americans.  Several things are contributing to a slowdown of the economy - the housing 'crisis', credit fears, and general skittishness from investors and the stock market.  Federal Reserve Chairman Ben Bernanke endorsed the idea of a temporary short-term stimulus package to lawmakers, saying that putting money into the hands of people to spend quickly would help prevent a slowdown:

"We're not forecasting recession but, rather, at this point, slow growth," he told lawmakers.

Bush's plan, which should be unveiled later today, is likely to revolve around some new tax cuts and rebates.  Individuals could receive a check as much as $800 (married couples would receive $1600), and businesses could receive some new tax breaks for investment.  Since Congress has to sign off on his proposal, he is not likely at this point to push for making his 2001 and 2003 tax cuts permanent, which is something most Democrats oppose.

There are a couple key things to remember here.  First, WE ARE NOT IN A RECESSION!!!  The MSM and the Democrats are hyping every little problem with the economy as the doom of our entire financial system, and that is simply not true.  The economy has been roaring over the past few years, and all we're seeing now is a potential slowdown of the growth.  Second, from my understanding of how these things work, Bush has the right idea - tax rebates to people and tax breaks on businesses are the way to spark growth.  It puts money in the pocket, and people will generally spend that money, thus righting the downward trend.  The Democrats in Congress are considering some other measures, but it's not clear yet what those will involve.

We'll know more today, but it sounds like Bush is on the right track.

There's my two cents.