Stimulating the Economy

January 10, 2003 • Volume 13, Issue 1
Would the president's plan help or hurt?
By Kenneth Jost

Introduction

Bargain-hunters Jayson and Kristy Harvey leave a liquidation sale last January at the Service Merchandise store in Brentwood, Tenn. Reflecting the nation's troubled economy, the 42-year-old home-and-jewelry specialty chain is holding going-out-of-business sales at its more than 200 stores.  (AP Photo/Michael Clancy)
Bargain-hunters Jayson and Kristy Harvey leave a liquidation sale last January at the Service Merchandise store in Brentwood, Tenn. Reflecting the nation's troubled economy, the 42-year-old home-and-jewelry specialty chain is holding going-out-of-business sales at its more than 200 stores. (AP Photo/Michael Clancy)

President Bush is proposing a $674 billion plan to boost the economy centered around eliminating the taxes investors pay on corporate dividends. Bush's plan also would speed up tax cuts for high-income Americans due to take effect in 2004 and 2006. Democrats are offering rival stimulus plans that cost less — around $100 billion — and provide more relief for average taxpayers. The Democrats also propose helping fiscally strapped states and extending unemployment benefits. Meanwhile, some experts say the economy is already turning around and that new tax cuts would only worsen long-term fiscal problems, now that budget deficits have returned.

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