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Politics : Formerly About Advanced Micro Devices
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To: Scumbria who wrote (132098)2/9/2001 3:34:51 AM
From: Joe NYC  Read Replies (1) of 1572232
 
Scumbria,

The net budget will increase because of defense spending, just like it did under Reagan.

The defense spending has been shrinking since about 1986 as a percentage of GDP, and in subsequent year, it was shrinking in not only real dollars, but in nominal dollars as well.

It has to hit a bottom some time. Whether we are there, I don't know. But please explain: Do you think the defense spending is going up in nominal dollars, real dollars or in % of GDP?

My guess, it is not probably going to stay at about 3% of the GDP. Just a WAG. Is your opinion based on any facts, or is it also a WAG?

Combine that with higher interest rates caused by pumping inflationary cash into the economy, and we will be looking at $150 billion deficits within two years.

Reagan tax cuts coincided with declining interest rates. I am not saying that one caused the other. Is it your opinion that tax cuts cause inflation?

Another thing to consider is the concept of real interest rates. The inflation has an effect on nominal interest, which in turn has an interesting effect on the debt, in that a 3% inflation of robbing the lenders of $180 billion on their $6 trillion.

Anyway, I am pleased to welcome you on the side of inflation hawks. I believe you were an inflation dove when you thought the inflation fighting was hurting Gore chances to get elected.

Joe
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