America's New Edge Is Low Cost Capital

With the decisive cut in the discount rate from 4.5% to 3.5% on Dec. 20, the Federal Reserve Board and Chairman Alan Greenspan have shown dramatically that they will no longer pussyfoot around how to get the stagnant economy moving again. Much has been made of the impact the cut may have on consumer confidence, and hence spending. But the real benefit of the new, vigorous Fed action will come from the effect it has on business investment and the direct stimulative effect business investment has on generating economic growth.

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