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Politics : Ask Michael Burke -- Ignore unavailable to you. Want to Upgrade?

To: Skeeter Bug who wrote (87272)	12/20/2000 9:55:28 AM
From: Hawkmoon	Read Replies (3) \| Respond to of 132070

btw, i haven't seen the latest numbers, but i'm quite skeptical of a $230 billion surplus Well, I was speaking with a congressman from Minnesota a couple of weeks ago and he confirmed that the surplus is actually that much and that we can anticipate a similar amount each year so long as GDP growth remains at 3%. Now of course, that will change if we see more folks unemployed since the greatest percentage of the surplus is derived from payroll taxes (FICA) which go into the trust fund. Btw, he did listen rather intently when I described the fact that every year we have a surplus, the US national debt increases. This is due to the fact that SSTF surpluses have to be parked in government debt, namely US T-Bills. And since we're not paying down currently held national debt with that surplus in full (only 30 billion of the 90 billion surplus was paid down last year), that means the politicians are spending it and increasing national debt in the process. Were the govt to pay down $200 billion/year in national debt each year, the markets would opt for holding T-Bill over commercial, cognizant of the fact that they had a guaranteed buyer each year which would obviously skew the bond markets. Quite comparable to what would happen if a company announced it was buying back each year with all of its "excess" earnings it wasn't using to finance growth. And Lord knows what they are going to pay down this year, given the fact that treasuries have already increased in value tremendously since last spring, with the yields going from approx 7% down to the current 5.42%. was micron more productive when they made 4 mb drams and made billions (on paper, anyway) or when they made 64 mb dram for less than the cost of the 4 mb drams and they were losing billions? hmmmmmm.... Well, my only comment on MU is that they were planning on greater demand than actually presented itself. I know that they halted construction on one of their Fabs down in Utah, I believe in 1998, when the crushed economies in Asia started dumping DRAMS on our markets again. But it goes to show that being able to build 64mb DRAM for less than 4mb DRAM, a company has to be careful not to exceed potential demand. But that also shows that pricing trends in semi-conductors are obviously deflationary given the increase of performance over price. ron, re it talent. one could argue that a credit bubble created companies that should have never existed. Possibly, but it certainly doesn't account for MU's problems, does it? The credit bubble had nothing to do with the inability of the marketplace to absorb large quantities of cheap high density DRAMS made possibly by exponential advanced in technology. That, I believe, is the primary problem right now... the rate of technological progress is rapidly exceeding the economy's ability to make use of those advances. But that is HARDLY inflationary. In fact, it supports some economist's views that we're facing deflationary threats because supply is outpacing demand. Regards, Ron Regards, Ron