- Updated: Pedestrian killed during traffic collision on I-55 (10/21/16)4
- Scott County Sheriff Rick Walter faces challenge from criminal investigator Wes Drury (10/21/16)8
- Shooting injures two people in Cape early Tuesday (10/19/16)34
- 18-year-old killed in one-car crash Thursday morning (10/21/16)1
- Man arrested after dispute at school spurs brief lockdown (10/21/16)6
- Perry County: A great place to find home away from home (10/14/16)
- 'I feel for them' (10/20/16)1
- Tours provide a glimpse of Cape Girardeau's supposedly haunted past (10/17/16)1
- Benton man accused of statutory rape, selling pot (10/20/16)1
- Crews are working on the new Drury Hotel (10/21/16)1
Tax holiday could boost sagging economy
The economy, which was deteriorating noticeably from the middle of last year, is now almost certainly in recession.
It is likely that the recession will be dated officially to have begun earlier this year.
It is a recession, we are persuaded, that was brought on by excessive tightening by the Federal Reserve during 1999 and early 2000.
As though recognizing its mistake, the Fed has moved aggressively to cut interest rates this year, acting to do this no fewer than 10 times since January.
Another half-point cut last week was the third since Sept. 11 terror attacks. With the latest Fed action, the benchmark federal funds rate fell to a 40-year low of 2 percent.
This means that the prime interest rate -- the rate that lenders charge their most creditworthy borrowers -- is at a similarly low level.
Many observers weren't sure we would ever again see rates this low. Certainly it is good to see the Fed move this aggressively.
But it almost certainly won't be enough to pull the economy out of its steepest nosedive in years.
Lawmakers at the state and federal level should consider legislation to enact a sales tax holiday, if not to take effect before Christmas, then early next year. Sales-tax holidays have proven a good and sound policy in the seven states that have tried them, plus New York City.
We would like to see one enacted in Missouri and other states, with the federal government making states whole for any lost revenues. Legislation has been introduced on a bipartisan basis to do this at the federal level.
Beyond this, it would be great to see the president's stimulus package passed, moving up his tax cuts to take effect Jan. 1. If Congress were to do this, the economy would be likelier to come roaring back in 2002.