Economics
The following editorial appeared in the Miami Herald on Tuesday, Jan. 22:
In a welcome show of bipartisanship, Congress and White House are coalescing around the idea that an economic boost is needed. There are good reasons to worry that the country is going into a recession, if it isn't there already. Foreclosures continue to mount, and the housing malaise is roiling financial markets. The Dow's plunge last week may have been the jolt that lawmakers needed.
That said, there are right and wrong ways to stimulate the economy. Economists generally agree on the central principles: The boost has to be temporary, timed right and targeted for effectiveness. The goal is to increase spending that spurs growth and economic activity.
Remarkably, congressional leaders and the White House generally are in agreement on these principles. Moreover, there are signs that each side is bending, which should encourage quick action. The tussles, of course, will come over specifics of the stimulus package. Tax rebates for individuals, more unemployment aid and food stamps, tax breaks for business and more are on the table.
For his part, President Bush was smart to take permanent tax cuts out of his proposal. Such cuts clearly would go beyond a temporary boost. Congressional Democrats also signaled willingness to consider provisions to aid businesses. Those are promising signs. Sensible compromise will help speed the process, and quick action is needed to prevent a recession or lessen its effects.
Federal Reserve chief Ben Bernanke provided sound advice to the House Budget Committee last week. "Getting money to people quickly is good," he said. "And getting money to low- and moderate-income people is good in the sense of getting bang for buck"
