Mike:
Which came first--how much of the surplus is taxes from cap gains?
Maybe if the market crashes, the surplus dries up, and we wont
have a recession hehe.
I doubt much of the surplus is due to CAP gains. We may see more of this this year when people use the better treatment of long term capita gains to change their positions. In the past, these surpluses were not due to Cap gains either. In any event, I do not wish to stop this string of "goldilock" situation when we can continue without a recession for seven years running, and going..going... I cannot find a single positive attribute in a recession.
"I'd bet there have been long periods of recession which have
little to do with the federal budget."
You are absolutely right. We did not have many period of budget surpluses either. Most recessions are either cyclical or induced by unexpected shock (Oil embargo for instance) to the systems which forces rapid reallocation of resources. Our economy is a very big ship and it cannot turn on a dime. The tax change treatment of real estate investment in the early 80' was such a dislocation that landed us the banking and S&L crisis. It was completely unnecessary. If they wanted to close loopholes, fine, but these things must be done gradually, grandfathering prior business decisions based on prior tax laws.
As for "aggregates" they mean exactly what they are "the sum total of", so aggregate demand is the total demand in the economy, and "aggregate wishful thinking" is equivalent to "irrational exuberance" (VBG). By the way, it is also a term used in construction (little to medium size accumulation of stones), and even in geology, but I must admit my English is not geological enough to be sure on this point. I hope, some of our "less English Challenged" posters will help me in this regard (G).
Zeev |
