While Wall Street debates whether the economy will sink into recession and how serious any downturn might be, Washington is already planning to take action. Capitol Hill sources tell me that House Democrats, led by Speaker Nancy Pelosi, will probably offer up a $100 billion package of tax cuts and spending increases to juice the economy.
President Bush may offer his own short-term package at his State of the Union address later this month, as well as push for extension of the 2001 and 2003 tax cuts and a lowering of the corporate tax rate. Among the possible stimulus options are tax rebates for middle- and lower-income Americans, a payroll-tax holiday, accelerating the depreciation or expensing of new equipment by business, and federal aid to states.
Here is a previous post on the efficacy on such Washington pump priming.