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Politics : Impeach George W. Bush -- Ignore unavailable to you. Want to Upgrade?

To: aknahow who wrote (1035)	12/31/2000 12:10:23 PM
From: RockyBalboa	Respond to of 93284

Your thought is correct. I do not think Greenspane is against tax cuts. I have looked into GWBs plans to cut taxes, but I see that he will not follow a balanced approach, ie the amount of the planned tax cuts will definitely not be offset by equal cuts in spending. What Greenspan does is actually what every good central banker does. He will choose an accomodating monetary policy hence the need to ease rates will diminish with the net amount of expansion provided by lower taxes (or by the amount of expansive fiscal policy). IMO it will have some effect on the interest rate curve. The long term rates could go up a bit because lower taxes means less net buying (or maybe even creation) of Long term debt reversing the decline of 10 and 30 year rates. The upside tendency on the short term money could remain depending on the effect a tax cut has on the economy. Inflatonary pressure in an economy operating near its capacity limits, still near at full employment, looming energy prices, perhaps pressure coming from the external value of the Dollar is still a threat. Also seen from this point, the best what AG can do is to take a wait & see attitude. Do not forget that the stock market is a leading indicator of the future economic development. It is pointing to a weakening (and I expect weak numbers in Q2 and the 2nd half of 2001), hence there will be enough time to take countermeasures.