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Politics : PRESIDENT GEORGE W. BUSH -- Ignore unavailable to you. Want to Upgrade?

To: Neocon who wrote (30333)	8/20/2000 9:44:37 AM
From: ztect	Read Replies (1) \| Respond to of 769667

We agree and disagree, because maintenance of high employment and economic growth can be sustained without widening income and wealth disparities through broadening the investment base allowing for "trickle up" rather than "trickle down" economics. I was looking for a source of per month dollars being invested in mutual funds, and haven't found one yet. But I did find this article below in the NY Times from last year which I took some excerpts from. archives.nytimes.com "United States investors pumped an estimated $24.5 billion into stock mutual funds in April [1999], the highest monthly inflow since September. The flows to stock funds exceeded March's total of $23.2 billion by almost 6 percent, the Investment Company Institute reported yesterday. The flows to mutual funds were running at about the same rate in the early days of May [1999]... ...Investments in mutual funds usually slow after April because most 401(k) retirement plans are established early in the year..." When more people save money and invest in the markets that provides more money to borrow from and for capital for growth. Savings provide more money for private companies and individual to borrow . Investments provide capital for public companies to develop and expand. Individuals borrowing for homes and businesses fuels small business and job creation while giving these borrowers equity from which they can borrow at better deductible rates. Broad base investment through the purchasing of shares in companies gives those purchased companies the capital for expansion including job creation. Moreover, when there is more savings (money) to borrow from, especially with the government reducing its debt, the supply increases putting less pressure on demands allowing for lower long term rates. Which, in turn, puts pressure on short term rates to stay lower as long as inflation is kept in check. These long and short term rates effect the prime rate which then determine the rates for mortgages, home equity loans and credit cards. I refinanced at 6.5% from 8.38%, increased my mortgage by $40,000 to provide me with $30,000 after paying off fees and non deductible credit card debt, and used $20,000 as my own little leverage fund which I've turned into another $200,000 investing in the markets. Best of all due to the rate reduction my 30 year mortgage only went up $125 per month that's deductible. Moreover I increased the amount I can depreciate, since my primary residence is an 4 unit apt bldg w. rents more than offsetting my mortgage costs. (Actually I get paid $1000 gross per month to live in a 1,200 sq. ft apt). So the decrease in interest rates provided me in essense a huge "tax" break at little cost which I invested in markets, that provided capital for the companies I invested in to expand and create higher paying jobs. The presumption that if you give the few more real dollars widening the disparities, that they will invest more wisely than those that have little left over disposable income IMO is a fallacious one. Cutting marginal rates won't necessarily provide more disposable income for investment especially for the middle brackets that are only getting a couple thousand dollars. Lower interest rates will, and that can better be obtained by paying off the national debt and encouraging people to save and build equity from which they can borrow at even lower rates. Heck, I use my deductible margin to pay off credit cards after I use the 35 day deferment from the credit card purchase. Just have to learn how to make your money work the most for you. z