U.S. Chamber Calls for Federal Policies to Bolster Economy -- Monetary and Fiscal Response Will Lessen Downturn

WASHINGTON, D.C. – The United States Chamber of Commerce said the likelihood of an economic downturn following the terrorist attacks of last week can be lessened through proactive monetary and fiscal policies.

"The unprecedented attack on the United States last week is the type of event that can tip a weak economy into a recession," said Martin Regalia, Chamber chief economist. "But the severity and duration of an economic downturn can be mitigated by having the right policies in place, moving swiftly to advance additional monetary and fiscal measures, and planning ahead to stimulate growth."

Blue Chip Economic Indicators released a survey today showing 80% of business forecasters predict the U.S. economy is in a mild recession that will last through the end of 2001, with renewed growth starting in the first quarter of 2002.

The administration's tax cut and spending package, together with Federal Reserve action to cut interest rates and pump in liquidity, will slow the decline, according to Regalia. The Chamber is urging lawmakers to pass an additional economic stimulus package to provide economic insurance and boost consumer confidence. Including energy, transportation and infrastructure improvements in such a package will help to address longer run problems as well.

"The stock market may not respond to patriotic sentiment, but economic laws are not undone by terrorist attacks," said Regalia. "The right monetary and fiscal policies, which are already in place, combined with further pro-growth initiatives will ensure the economy rebounds quickly from any recession."

The Chamber urged congressional leaders to provide the funds necessary to prevent further catastrophe in the airline industry and prevent the destruction caused by the terrorist attacks from echoing through the U.S. economy.

The U.S. Chamber of Commerce is the world's largest business federation representing more than three million businesses and organizations of every size, sector and region.
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