Sensible Stimuli

The slowing US economy was in need of stimulus before Sept. 11. That need has grown in urgency, with large layoffs in major industries since the terrorist attacks. Generally, there's been a drop in people's inclination and ability to spend.

Governments should do what they can to soften that effect and help the economy rebound, although much depends on public attitudes.

Increased spending to aid the cleanup and rebuilding in lower Manhattan will have some narrow benefits. So will federal funds for airlines hit hard by fewer passengers.

But the problem has become more serious, and so should the government's response. Congress and President Bush are fashioning a stimulus package. Its focus should be squarely on helping workers facing large losses of income. The extension of unemployment benefits makes sense. It will help people retain some spending ability as they seek new jobs.

Any new tax cuts should be focused on mid- and lower-income families who are likely to be most affected by the economic slump. Much is being said about the stimulative effect of tax breaks for businesses, but there's little prospect such breaks would spark business spending in the current economic climate.

Large-scale infrastructure spending is also on the stimulus agenda. Many of these projects - from upgrading drinking-water systems to improving passenger rail lines - are good candidates for public investment, and they will create new jobs.

But the economic rationale for such projects should be probed before they're approved in the heat of an emergency.

And the overall fiscal health of the federal government should be kept in view, too. The move away from deficits and toward reducing the national debt in recent years has been positive, keeping down interest rates and brightening the long-term economic picture for the country. It shouldn't be abandoned.

With the Federal Reserve continuing to make money more available, and Congress and the president making wise choices on stimuli, the economy can sooner return to growth.

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