SLOWING ECONOMY
Don't leave out the poor
The Bush administration's economic-stimulus package does not provide rebates for the very poor, specifically families making less than $24,900. Once again, this Republican administration wants to stiff the working poor in favor of the wealthy. Not only is this morally wrong, it is economically disastrous.
The working poor are far more likely to spend a rebate than the wealthy. That extra spending will create demand for products and services, which in turn will create jobs. In the end, business owners will see increased profits and will get their share.
Stiffing the working poor will only increase the federal deficit and dig us deeper into the recession we are likely already in.
JEFF SOMMERS, MAPLE GROVE
Two choices The business cycle, with periods of growth and recession, is a part of our economic system.
Our government has two major tools that it can use to shorten a recession -- fiscal policy and monetary policy. For fiscal policy to be most effective, you have to have something near a balance or surplus of government spending during the growth period of the business cycle so that you can cut taxes and/or increase spending if you see a recession coming. Otherwise it's just another loan from our children -- with interest to China.
This leaves us with one tool that may be effective right now, monetary policy in the form of Federal Reserve rate cuts. But the cuts have to be used judiciously to be most effective, and timing is everything. Lately, the market drops every time the Fed cuts rates. At best, these cuts may be delaying the onset of a true recession. At worst, they are using our only tool too early.
What I am basically saying is this: Don't be surprised if the real recession does not begin until after November 2008.