Their goal should be to keep the low phase of the business cycle in positive territory. From that perspective, let's look at where Congress is heading. President Bush has been criticized by Democrats and some Republicans for wanting to limit the growth of government's discretionary spending to about 4 percent a year. The Senate asked for 8 percent growth, but a compromise seems likely at around 5.5 percent growth in federal spending. Remember that the latest measure of the economy clocks it at an annual growth rate of only 2 percent.
Experts seem pleased even though some of the spending is done on credit.
A CUT OF THAT SIZE would still leave government spending growing faster than consumer spending, but the gap would be narrowed. The tax reduction would also give the economy a noninflationary boost and create more business activity to be taxed. And more important, it would help the economy fly higher and at a safer distance from the hard ground of zero growth.