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

To: TigerPaw who wrote (37828)	9/18/2000 11:46:17 PM
From: Tom Clarke	Read Replies (2) \| Respond to of 769667

Gore's economic adviser sees dollar 'tumbling' WASHINGTON, Sept. 18 (UPI) -- Al Gore's top economist has predicted that the rise in the United States trade deficit meant that the dollar was going to 'tumble', not necessarily next year, but within the coming decade, it was learned Monday. "How much longer will Americans and foreigners put up with this level of deficit? Certainly a year or more, but it's very unlikely that we can do it for ten years", Prof. Alan Blinder said Sunday, stressing that he was speaking for himself rather than the Gore campaign. "The turning point will come when the average investor in Singapore or Switzerland looks at the rate of return and decides to shift the money", Prof. Blinder added, answering questions at the Woodrow Wilson Center in Washington after giving a briefing on the Gore campaign's economic policy. "It's going to mean a much weaker dollar. I don't think it's going to tumble in the next year, but I do think that some time in the next decade, it's going to tumble." "We have to reduce our dependence on foreign capital -- which is at least as important as our dependence on foreign oil. It is unseemly for the U.S. to be sucking up so much of the world's capital", he added. "This is a non-saving economy, but we are having a capital spending boom - because we are borrowing it from foreigners". Last week, the Department of Commerce announced that the trade gap was widening to a record. The U.S. spent $101 billion more on imports than it did on exports in the first quarter of this year, a gap that widened to $106 billion in the second quarter. With the latest rise in the price of imported oil, some analysts suggest that the trade gap could hit $500 billion this year - money that is balanced by massive capital inflows by foreigners investing in U.S. stocks and bonds. As a result, the U.S. is now the world's biggest debtor nation, and the debt could prove to be the weak point that could eventually bring America's longest-ever sustained economic expansion to an end. Prof. Blinder, who served on President Clinton's Council of Economic Advisers, and then served alongside Alan Greenspan as vice-chair of the Federal Reserve, now teaches at Princeton and is the most eminent of professional economists advising the Gore campaign. Prof. Blinder said that the essence of Vice-President Gore's economic policy could be reduced to a single question: 'What do you do after the best eight years in US economic history? - Figure out what you did right and keep doing it". The three crucial strategies would be to maintain fiscal responsibility, to promote open trade, and to target spending and tax cuts towards education, health care and the needy. Three years ago Prof. Blinder suggested in an essay that one of the most important events of the last quarter of the 20th century was "a strategic shift in the balance of power" away from labor and towards capital. The economic policy of a Gore administration would seek to correct some of the consequences of that power shift, he said yesterday, in comments likely to fuel charges by the Republican Presidential campaign that Al Gore is "a traditional tax-and-spend Democrat". "It is probably beyond the capacity of government to reverse that shift in the balance of power, but the policy is designed to ameliorate some of the problems that shift causes", Professor Blinder said. He noted that income tax credits for the working poor, tax cuts and government subsidies for retirement funds for middle and lower-income families were key features of the Gore plan. "The people at the top have done smashingly well", Professor Blinder said, adding that the Gore plan sought to spread the benefits of the boom down the income ladder. Republican candidate George W. Bush's plan to privatize some of the Social security system "could undermine and even obliterate the social security system's ability to redistribute income towards the poor". "Social security is the most effective income redistributor we have", Professor Blinder emphasized. "It's what the government is supposed to do. Al Gore thinks so". Copyright 2000 by United Press International. vny.com