Time is Now for Economic Action, Says Citizens for a Sound Economy

In the wake of terrorist attacks on New York and Washington, there is growing concern over the health of our nation’s economy. The stock markets have fallen sharply since the attacks, layoffs are increasing, and confidence in the economy seems to be waning.

Paul Beckner, President of Citizens for a Sound Economy, issued the following statement regarding the health of our economy and actions that should be taken to strengthen it:

“Since the tragic attacks on our country last week, we have witnessed the Dow Jones Industrial Average retreat more than 1,000 points, nearly 10 percent. This happened despite a half point reduction in the Federal Funds lending rate by the Federal Reserve Board. It is now clear that our economy is in dire need of further economic stimulus beyond cutting interest rates to restore economic growth. CSE has joined with several groups to call for immediate Congressional action to cut taxes.

“While harmed by the heinous attacks last Tuesday, consumer spending has performed well during this year’s economic slowdown. The area of our nation’s economy that requires fiscal stimulus is investment. What was a cause for concern prior to September 11 has now become a threat to national security. Congress cannot afford to wait any longer to reduce the rate on capital gains or lift the tax burden on business investment. Further, Congress must speed implementation of the tax rate reductions in President Bush’s tax cut package.

“In order to deal with these problems effectively, we must restore the nation ‘s economy as quickly as possible. If we are going to wage a protracted war on terrorism, which is needed, we need the economy running at full steam so we have the resources necessary to fight terrorism effectively.

“To do this, three things should be done as quickly as possible. First, we should allow businesses to ‘expense’ investments such as new factories or machines, rather than depreciating them. This will boost capital formation and help rebuild wealth. Second, we should accelerate the President Bush’s tax rate reductions that were passed earlier this year. Many of pro-growth elements of the President’s plan don’t take effect until 2004. Full rate reductions should be made effective retroactive to September 11, 2001, if not earlier. Lastly, and perhaps most importantly, capital gains tax rates should be lowered. This will stimulate new investment and result in a more productive use of capital.”

For more information about CSE please visit http://www.cse.org. For more information or to arrange an interview, please contact Chad Cowan at 202-942-7692.

CONTACT: Chad Cowan or Mark Carpenter, 202-783-3870 both of Citizens for a Sound Economy