I explained why it was not quite a stimulus under these circumstances. Demand is only increasing at the rate of increase in income, or, in other words, in line with growth. Thus, it is maintaining a reasonable balance between supply and demand, and is not particularly inflationary. The same effect might be achieved through government spending initiatives, but that is against our philosophy. Precipitous debt reduction, on the other hand, would run the risk of a sharp fall off in demand, a glut of goods, deflation and recession. Thus, the main significance is to avoid the instability of acute debt reduction, while avoiding increasing the meddlesomeness of Washington.....
On the other, I am tired and sick or I would have caught it immediately. You are simply using the wrong figures. He proposed using a quarter of the surplus for tax relief:
Cut Taxes Responsibly: Governor Bush’s $460 billion tax cut over five years will contribute to raising the standard of living for all Americans. His budget uses only about a quarter of the surplus for tax cuts, reserves all Social Security funds for Social Security only, and still leaves extra money for debt reduction, defense, education, and other priorities.
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