Al Gore vs George Bush: the moderate's perspective Message Board

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Politics : Al Gore vs George Bush: the moderate's perspective

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To: Hawkmoon who wrote (2599)	10/16/2000 2:09:04 AM
From: Zeev Hed	Read Replies (2) of 10042

I think that you misinterpret Alan Greenspan, he would rather all surpluses go to reduce the debt (a mistake in my opinion), until the debt is more "manageable", probably half what it is now. AG is also very much against investing part of SS into the stock market, and I think he has that one quite correct. Why is it a mistake to pay down the debt as rapidly as possible? I think that budget surpluses much in excess of 1% to 2% have real negative economic implications. Historically , we have gone into recessions after such surpluses, and recessions are followed by budget deficits that are much greater than the surpluses in the "good years". May be the reasons for surpluses precipitating recessions is simply that surpluses occur when the economy is growing faster then normal and thus the old cycle of inventory retrenchment came into play. Personally, I think that very large surpluses syphon money from the economy. The government takes in more than it pays out, or in essence it is following a restrictive fiscal policy. If that "restrictive stand" is not too large (like 1% to 2% of the budget and thus a much smaller percentage of GDP), soft landing can be achieved, if the surplus is much greater, look below. One of the reasons I am worried about next year's market is that the surplus will probably exceed 2% of the budget. I am not sure where the gentle British economist (the story in a prior post) got his number of $30 B of treasuries being bought back, my calculations show that we have gone down by $100 B in the last 10 months (since 12/31/99) in the "public debt", thus the buy back must have been a solid $100 B, and that is a serious chunk of money to take out of the economy. Zeev irrevolute.iuma.com

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