AG is looking at the Surplus. Most of his comments were directed toward reducing the amount of the surplus; and seemed less concerned with using taxes as an economic stimulant. I believe AG has looked at the historical trends in Japan and England a decade ago and sees a danger in running continuous high government surpluses. It is likely that he is concerned that the US economy could suffer shocks similar to those economies when they went from rapidly expanding to highly recessionary.
AG appears to have an in built hatred of government expenditure. His back ground, a la Anne Rand, makes him an ardent opponent of giving money away to poor young black girls as a means of priming private expenditure. He likely feels much more secure with the concept of seeing a bunch worthy rich people getting a break. Tax cuts, particularly for the rich, are his kind of meal.
Faced with the realization that interest rate cuts can not effect major changes in the growing budget surplus he has reluctantly accepted that his monetary tools are not up to the task. Tax cuts to rich guys, not give aways to the unworthy poor, are the best of the bad alternatives.
The problem is that all the friendly cooperation with the new administration will not even last through the appointment of a cabinet. In three months congress is going to be a bedlam. And tax cuts will be sitting on the steps of the capital waiting for an appointment. Approval of increased Government programs will be equally put out the door.
My feeling is that this congress will be known as the biggest Pork congress of the last 50 years. Private Deals will abound and every congressman will be gnawing away at the biggest pig in the history of the country. Fearing a trip home with nothing they will all agree to disagree, and set about dividing up the carcass.
In the end that might work. Capital expenditure is something we really need. (Having ridden through many major cities in the US recently I can say that the roads are a mess.) Throwing all that money in the hands of states and cities for roads, bridges, dams, and buildings might just do the trick.
But if we get through it it wont be planned and it will be because the mass of elected officials, unable to agree on anything, and fearing a significant public backlash will be trying to please the electorate, and not themselves. |
