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Technology Stocks : Dell Technologies Inc.
DELL 138.28+3.5%3:41 PM EST
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To: Lee who wrote (138151)7/31/1999 1:58:00 PM
From: Chuzzlewit  Read Replies (2) of 176387
 
Lee, I am frankly perplexed at the cross-currents in the economy. I believe that interest rates are too high. If you subtract the core rate of inflation from the bond yield you get a real rate of return almost double the historic real rate of return on debt. Clearly, the credit markets are acting as if inflation will resume soon.

It seems to me that modest real wage increases are not bad. I don't know what the most recent numbers show, but as I recall (in general terms) US lower and lower-middle class wage earners had not experienced any real growth for some time -- they were economically no better off than they were a decade ago.

I think that probably the biggest overhang we have is the national debt, and the Republican tax cut plan, while appealing to me individually, precludes or limits the ability to pay down the debt, while at the same time serving as a stimulus to the economy which would certainly cause the Fed to crank up rates. Reagan's tax cut in 1981 led to a massive increase in the national debt and continuing high interest rates -- despite his predictions.

My modest tax proposal would be to raise the standard deduction by $5,000 and eliminate the marriage tax penalty and leave it at that. I have no idea how much this would decrease tax revenues, but it would disproportionately benefit people at the lowest end of the economic totem pole.

TTFN,
CTC
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