SBE Council Chief Economist Statement on Coordinated Rate Cuts

Today, Raymond J. Keating, chief economist for the Small Business & Entrepreneurship Council (SBE Council), issued the following statement regarding the coordinated interest rate cuts by major central banks:

“The most one can say about these coordinated half-point cuts by the Federal Reserve, the European Central Bank, the Bank of England, the Bank of Japan, the Bank of Canada, the Swiss National Bank and the Swedish Riksbank is that they are better than nothing.

“Monetary policy measures have run their course. In fact, when it comes to getting the economy moving, monetary policy is simply the wrong tool. What the economy clearly needs is action in terms of fiscal policy.

“But government doling out more tax rebate checks or spending more money on infrastructure are not the answers. Instead, we desperately need pro-investment, pro-entrepreneurship tax and regulatory relief. For example, slashing or killing off capital gains taxes, and large reductions in corporate and personal income tax rates would boost pro-growth incentives and revive confidence.

“Unfortunately, many of our policy leaders in Washington seem intent on going in the opposite direction of more taxes and more regulation. If that’s the policy path we take, the economy – that is, consumers, workers, investors and business owners – will pay a dear price for the foreseeable future.”