Tax Pax

A (we think) thoughtful selection from John Cranford's article, ("Pitfalls of a Stimulus") that appeared in this week's CQ Weekly:

. . . Abesent those tax cuts, the 2001 recession might have been much worse. But that lucky happenstance was an accident. Now is a different time, and in fact, the broad economy has been stimulated quite a bit over the past couple of years by the Federal Reserve's policy of holding interest rates at historic lows long after 2001. For Congress to pass a wide-ranging tax cut bill now to stimulate demand would undercut the Fed's more recent actions to withdraw its 'accommodative' interest-rate policy and rein in an overheated housing market . . . Still it's not hard to imagine that Republican leaders in Congress (Bill Thomas being the noted exception) will use a threat to the economy's expansion as justification for enacting billions of dollars in tax cuts. At least $90 billion in cuts is already on the table as part of a budget-reconciliation bill that had been planned for this month and is now on hold. A horde of other special pleaders (insert dirty word, like "lobbyist" here) is waiting in line to jump on any tax-cutting train . . .