Wrong ailment, wrong cure (Critiquing Democrats' economic "stimulus" plan)

The Washington Times ^ | Jan. 19, 2003 | Lawrence Kudlow

[FairOpinion]

After all the gnashing of teeth, it turns out consumers turned in a positive performance during the holiday season. Retail sales increased more than 1 percent in December, yielding a near 5 percent pace over the past year.

Consumer spending has been the backbone of our economy for the last two years. In that time, it has grown at about a 3 percent rate, despite the stock market collapse and the deep business-and-profits recession. This is a solid consumer performance

[FairOpinion]

"So let's be perfectly clear: Not until this stock market virus is cured will business and the economy ever truly recover. This is why President Bush's tax-cut plan is so important. By abolishing the double tax on dividends, it aims directly at the stock market — the real source of the current economic funk. But the true worth of Mr. Bush's tax-free dividend proposal is that it will lift stock market values and wealth. Stock prices will rise, investor returns will increase, old capital will be unlocked and new liquidity will be reinvested. "

As usual, Kudlow is 100% right.

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