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Too Little, Too Late?

Only time will tell whether the Fed's interest rate cuts will help entrepreneurs.

By C.J. Prince

Opinions expressed by Entrepreneur contributors are their own.

The economic slowdown and rumors about a recession in the offingfor 2001 is causing small-business advocates to voice frustrationover the Federal Reserve's delay in lowering interest rates.When the flow of money slows to a trickle in the public markets andtraditional borrowing rates remain high, entrepreneurs get hitfirst and, arguably, hardest.

The economy depends on entrepreneurial growth, so the Fed shouldhave ample incentive to cut rates and make other pro-small-businesspolicy changes. So says the Small Business Survival Committee, a nonprofit,non-partisan small-business advocacy group. In its latest report,SBSC chief economist Raymond Keating praises Congress' 1997capital gains tax cut and the incentive it provided for investmentin entrepreneurial ventures, but also criticizes the tightening ofmonetary policy in late 1999 and early 2000, calling those ratehikes "grossly misguided policy measures."

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