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America has shown its best side in recent weeks in the efforts to help the victims of September 11. And it is showing its strength has it moves to strike back and tighten security at home. Dealing with the economic impact of these horrendous crimes has,appropriately, not been the first priority.
But, of course, the economic impact is important. And finding the right economic response to the crisis is a vital part of showing the terrorists they have not undermined the strength of America and its allies.Americans had believed they were safe from aggression in their own country, but today many, understandably, feel nervous about the future. Consumer confidence has fallen—according to a CNN/Time poll, 40percent of consumers plan to cut back on spending and 42 percent plan to cut back travel. Many businesses were directly affected by the crisis, and many others are cautious about new investments.
This policy brief will look at the state of the economy in the aftermath of the attack and at the economic policies that should be used in response to the crisis. Those policies must be chosen that meet the needs of the economy for short-run stimulus, while at the same time preserve the strong economic fundamentals that have supported the extraordinary economic performance of recent years. In short, how do we get America (and the world) working again,while maintaining fiscal discipline and continuing the thrust of openness and globalization?