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Technology Stocks : Cisco Systems, Inc. (CSCO) -- Ignore unavailable to you. Want to Upgrade?

To: JRI who wrote (35872)	5/19/2000 2:55:00 PM
From: JRI	Respond to of 77397

Cisco trying to pull the NAZ train right now...we'll see if there is enough coal (for the engine) to last until 4PM..

To: JRI who wrote (35872)	5/19/2000 3:24:00 PM
From: GVTucker	Read Replies (1) \| Respond to of 77397

A key assumption to your solution (and an assumption that I couldn't support or refute): The United States' higher proportionate consumption at the expense of savings is a net 'bad' for the economy. There's a significant faction out there that believes that one of the major reasons why our economy tends to outperform most others on a consistent basis is precisely that supposed 'problem'. This higher propensity to consume can drive the economy in down times and help us out of recessions quicker. The other side of the coin, however, is the case that you present. And there is certainly a rational case that can be built there. But if you do indeed take the standpoint that the US's cultural propensity to spend hurts the economy, I still don't know if education would change this cultural attitude. Even changing tax policy by increasing the tax deductible amount that could be put into accounts wouldn't have much of an effect on the cultural problem. Tax-exempt savings accounts can be legislated out of existence as easily as they can be legislated into existence--note how quickly the IRA was changed, preventing deductibility for a large number of people. I do agree that the Fed and the rest of the government tend to focus too much on economic activity and unemployment. After all, only a piece of the inflation puzzle is contained on the demand side, and I would argue that the current beginnings of inflation are more supply driven than demand driven. That goes to what I believe is a misallocation of capital, and there's not much the government can do about that (well, actually I don't think that there's much that the government can do to help any economic situation, but that's another argument). Perhaps a solution could be a change in the mission of the Fed, having the Fed solely concentrate on inflation and not worry about the economy. Although some have argued that this dual role actually promotes unnecessary inflation, it might also be the case the it focuses the Fed unnecessarily on the economy. Secondly, I'd replace the Fed with a computer, and publish the data that the computer uses to make its decisions. That way, the markets can fully anticipate the Feds moves, and the removal of the uncertainty would in my mind be a plus for the markets, as it would remove a level of risk that must currently be discounted. I kind of rambled there with more of a stream of consciousness rather than a coherent essay. Did it make sense?