To spur business investment, some Republicans favor incentives such as investment tax credits or more write-offs for equipment. Others, like economist Lawrence Lindsey, want to cut the corporate income tax. But few companies will invest in equipment if orders remain low.
BOOST CONSUMER DEMAND
Democrats in particular want to cut payroll taxes or give low-income workers a tax rebate to get cash into consumers' pockets. Offering companies a tax credit for hiring could help, too. Still, the fear of layoffs and terrorism could lead consumers to save the extra dollars.
Speeding up spending on public works such as roads and buildings is being advocated by various Hill Democrats and Republicans. It would get money into the economy quickly. The problem is, much of the investment would have limited long-term impact.