As the U.S. military operations ramp up to deal with America's war on terrorism, Congress and the White House must fight on another front to salvage an economy in recession. What are the weapons of "Operation Economic Stimulus?"

Even before the terrorist attacks of Sept. 11, the American economy teetered on the edge of recession. After the attacks, the already ailing airline industry suffered potentially fatal losses and the stock markets reopened only to post record losses. Bush Administration pleas to "buy American" seemed unheard as investors continued to sell off stocks and consumers abandoned the malls. As the airlines announced layoffs of tens-of-thousands of employees, it became clear that terrorists had struck America on two fronts, human and economic.

Government - the president and Congress - must now decide whether to take brute force steps to bring the economy back to its feet, or wait and allow the free enterprise system to heal itself. 

Under the "wait and allow" scenario, backed by Federal Reserve Chairman Alan Greenspan, investors will eventually start to snap up the great bargains in shares of strong companies created by days of sell-offs and drive the stock markets back up. As Operation Infinite Justice swings into action, Americans' fears of new terrorist attacks will subside and they will return to stores, restaurants, airliners, vacations and all the other places where masses of money can be spent.

To rescue the economy by "brute force," the government could deploy a legislative stimulus package including further tax cuts and credits, financial assistance to the airlines and increased government spending for discretionary programs. 

Before the Sept. 11 attacks, debate raged in Congress over the shrinking budget surplus, protecting the Social Security surplus and holding down federal spending. No debate anymore. The $40 billion emergency spending bill (H.R. 2888) to deal with the terrorist attacks, the $15 billion airline industry recovery bill and increased need for new defense spending have combined to make saving money in the 2002 a moot point.

Spending $15 billion to shore up the airline industry was never really an option. The economy could no more afford to lose the airlines than it could the auto or steel industries.

Increased government spending need not be a bad thing. Government spending can be thought of as a "throttle" on the economy. Spending more money can accelerate the economy and help it recover from a recession. Spending less tends to hold back the economy, prevent inflation.

New or expanded programs and projects created by government spending create new jobs filled by new employees who then have new money to put back into the economy.

Economy stimulating tax legislation that could be sent to Congress could capital gains tax cuts, tax incentives for businesses and allowing businesses to more quickly deduct total costs of items like computers and software, thus stimulating sales in those industries.

Another round of direct tax rebates similar to those sent out this summer has even been proposed. Congressional Democrats have stressed the need for tax rebates and further tax rate cuts for lower income persons who may have been excluded from this year's tax rebate program.

Congressional leaders pushing for a legislative economic stimulation approach have stated they want to work out their political differences and come forward with a truly bi-partisan bill. The process of working out those differences promises to give Federal Reserve Chairman Greenspan's "wait and allow" approach a more-than-adequate chance.

A Recession: The National Bureau of Economic Research (NBER) defines a recession as a significant decline in activity spread across the economy, lasting more than a few months, visible in industrial production, income and trade. Most economists consider two consecutive quarters of negative economic growth to signal the start of a recession.