GOOD TAX POLICY it may be, but a stimulus package of any consequence, the president’s proposed tax cut just isn’t. Even if the president gets all he wants, which he assuredly won’t, the best that can be said for this “stimulus” is that it might help the economy, already in fairly good shape, grow a bit faster this year and next than would otherwise be the case–perhaps 0.2-0.3 percentage points this year, and less than 1 percentage point next year.
The White House realists, who have their eyes focused on November 2004, want to buy insurance that the unemployment rate, now 6 percent, will head down well before the 2004 elections. They concede that the economy is likely to grow at a rate of at least 3 percent this year, and more rapidly next, even without the so-called stimulus package, which should bring the jobless rate down. But they want insurance against, among other things, the possible depressing effects of continued high oil prices.
