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Strategies & Market Trends : Steve's Channelling Thread -- Ignore unavailable to you. Want to Upgrade?

To: Steve Lee who wrote (7714)	11/12/2000 3:42:11 PM
From: Zeev Hed	Respond to of 30051

Steve, if tax cuts are enacted during a future recession (or to hit when the recession hit, quite difficult since the change will probably start in calendar year 2002 if enacted in 2001), it sure could jump start the economy without fears of inflation. By the way, I do not fear a rational tax cut that promote equally consumption an investment, but if the cut goes as Bush plan mostly to to the "wealthy" (using Gore parlance), it will not help final dmand and thus not have a major impact on a potential recession, IMHO. Until suvch a recession shows signs of abatement, "the investment" portion of the tax cut will be reluctant to jump back into the investment scene and stay in treasuries, forcing these rate down, until the natural forces of low interest rates and adjustments in the economy allow for another growth spurt. The danger is that incorrect taxation and monetary policy may leave us in a long period of stagnation, like Japan in the last ten years, or even stagflation, like in the 70'. Zeev