Second, even if the stimulus came when the economy is recovering, unemployment, an effect of recession, would presumably be high, certainly higher than it has been recently. What's wrong, then, with a little extra fiscal oomph? The answer given is that inflation will rear its ugly head. But inflation didn't rear when unemployment recently got down to 4%. Until it is shown otherwise, a stimulus that would bring unemployment down to levels lower than 4% should not be avoided because of a fear of inflation. If and when the devil appears, the Fed can exorcise it by raising interest rates.
A fiscal stimulus, then, may indeed be appropriate, as Bush has argued, but if that is what he truly seeks, he would be well-advised to drop his proposal for ending the estate tax, which would provide nothing in the way of a stimulus. Second, instead of lowering rates on the highest-income class from 39.6% to 33%, he should agree to tilt his cuts toward the lower half of income earners, where the stimulus, dollar for dollar, would be greatest.
Finally, unless a tax cut for the wealthy is the be-all and end-all of his politics, Bush should compromise and spend a prudent amount of the surplus on health, education and Social Security, which is what most Americans want. In general, a fiscal stimulus can come either in the form of a tax cut or a spending increase. Both do the job.