PRESIDENT GEORGE W. BUSH Message Board

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Politics : PRESIDENT GEORGE W. BUSH

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To: Brumar89 who wrote (36364)	9/13/2000 1:41:50 AM
From: Neocon	Read Replies (1) of 769667

The significant element of Figure 9 is the trend line. They use nominal demand because clearly the economy was growing. If demand had been driving it, the price of goods and services would have been bid up, thus yielding a higher nominal demand. Instead, the supply of goods and services was increasing and being absorbed by the economy, which is why inflation went down at the same time, and nominal demand declined, with some fluctuation. In other words, more goods and services were chasing after a roughly similar propensity to spend. This is the significant difference between a Keynesian recovery and a supply side recovery. Whether the Fed was dedicated to preventing inflation matters little if the issue is the rise of aggregate demand. Inevitably, goods and services should be bid up, according to the Keynesian model. The comparison of the Reagan period and the first Clinton term is in constant dollars. Look at Figure 1 for real economic growth rates by President. (Clinton goes through '95). The use of the term "real" indicates a comparison in constant dollars........

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