Krugman comes off as honest, insightful, prescient in that article, while Stigletz is characterized as a history revisionist. Personally, I blame Greenspan and the Fed for inept meddling. When Greenspan should have acted in 96, he dropped that ball because of the Asian contagion that hit the markets. When Greenspan could have halted the impending market plummet in Dec. 2000 by simply cutting the *&%**( interest rates, he did nothing thereby setting the stage for the decline that has become a disaster under that idiot, Bush. "According to the Organization for Economic Cooperation and Development, an international research group, the so-called “structural budget balance,” which strips out the impact of the cycle, has gone from a surplus of 0.9 per cent of G.D.P. in 2000 (due to Clinton's fiscal responsibility) to a deficit of four per cent of G.D.P. in 2003 (due to Bush's skullduggery).
"It’s a figure that’s likely to increase. Many of the Bush Administration’s giveaways, such as the cut in dividend taxes and the abolition of the estate tax, are “back-loaded,” which means the really big handouts won’t get distributed until 2008, or later. As it happens, 2008 is also the year that the aging of the population will start to deplete the Treasury. In 2008, the first boomers will be able to pick up their Social Security checks; three years later, they will become eligible for Medicare. Unless the retirement programs are reformed (and there’s little sign of that happening), the aging of the boomers will have a crushing effect on the federal government’s finances." |
