So, you don't believe the US economy is going to grow? You don't believe UW is going to invest some of that extra income?
First, it isn't so much a question of whether the US economy will grow, but how it will grow. And second, the world is currently awash in capacity. My concern is more with the govt enabling bubbles (real estate, housing, in this case) to grow. They have to puncture at some point, and the larger they grow, the more harm they will cause. And with the growing inequity of wealth, a good deal of it buried in housing indebtedness (I know mkore than a few wealthy people who are house-poor). And with growing deficits. If it is true that we are at "war" (and I will stipulate that), and this war requires large amounts of money, then we shouldn't be reducing taxes in ways that will increase the deficit. "Sacrifice" shouldn't be limited to the guardsman who have to leave their jobs and families or to military people who are put in harm's way.
The US admin obviously thinks the economy can grow fast enough that the deficit and perhaps even the debt will become a smaller proportion of GDP.
Yes, well, but if we are creating imbalances, we aren't doing ourselves any favors for the future. And we know that a gargantuan imbalance is impending (the SS imbalance).
Given the rate of foreign investment the ROW thinks so, too.
The problem for money in the rest of the world is, where can large sums go? We are still the Big Mama. That won't last forever. The rising economies of the world still need us more than we need them. Just as the SS crisis really hits (assuming we do nothing), that may very well be different. China and India are growing fast, their internal markets developing, they will be sucking up investment capital as increasing rates.
Unless taxes are low you don't get productivity increases. Small productivity increases, less prosperity, less employment growth.
I don't agree with this at all. Productivity increases can occur at any time. Indeed, higher taxes could well spur great productivity increases, as do slowdowns, as people try to get more out of less. |
