Comments: Bush's scorched earth economic policy revisited

David

Do you really believe these forecasts of surplus will actually occur given the economic slowdown that began in the prior administration which were only profoundly affected by the 9/11 attacks. You express the problem in a curious fashion. What policies would you advocate given the then current situation? What policy mix would you advocate to strengthen the economy, promote growth and restore investor and public confidence so necessary to the economy and so damaged by the 9/11 attacks. And finally, what policy tradeoffs and consequences would you accept?

Why are huge government budget surpluses for the foreseeable future good economic policy? Although your column did not exactly make that statement, the tone was unmistakeable. Are interest rates lower then they might be because of the absolute elimination of the need for current credit and the concurrent reduction of the national debt? Well, both current and long-term interest rates are lower than they were when the US was running budget surpluses. Is inflation a problem because the currency is debased from printing money to pay for deficits? Well no, inflation in the US has not been a problem for many years through both the years during the late 80's and 90's through surplus and deficit because the Fed has controlled the money supply. Do investors fear the budget deficits? Well, the stock market seems to like the current economic climate, and, as the market is a discounting mechinism, it's voting that it expects the economy to continue growing and company profits to grow as well. I don't have trouble with your critique of excessive spending and the silly trade policies of the Bush administration related to steel and underwire bras. These are foolish economic policies generally, not just foolish Republician policies. David, it's not incoherence, it's domestic politics.

Posted by Gary Bezowsky at November 25, 2003 06:09 PM
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