If there are any economists that are freaking clueless, they certainly are all working for the Bush administration.
Sly, Apparently they aren't as clueless as you'd have us believe.
Even with deficit spending on the war, and tax cuts remaining in place, tax revenues hit an all time record just last week:
easybourse.com
Which suggests that the previous level of tax rates were too high and stifling economic growth.
Secondly.. the unemployment rate is 4.7%..
Thirdly, the DOW is likely ready to hit a new high. The only thing holding this back is the Fed intransigently ignoring the bond market and maintain rates so there's an inverted yield curve.
And this deserves a bit of comment here. If the US government wasn't deficit spending, the amount of US debt instruments available to the public markets would be lower than it is currently, while demand would remain the same. That would result in even lower rates, and likely excessive economic (inflationary) growth (or recession if the Fed continued to ignore the market rate for interest). As it currently stands, the 10 year bond is selling almost 75 basis points below the current Fed rates..
Thus, Sly, oh Marxist advocate of economic destruction, were there not additional deficit spending, the supply of US government debt would be exceeded by the demand for it by the global market.
So if the cost of this war were so destructive to the economy, we'd be seeing interest rates climbing, reflecting that no one wants our debt. Instead, rates are falling.
Hawk |
