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Strategies & Market Trends : ahhaha's ahs -- Ignore unavailable to you. Want to Upgrade?

To: ahhaha who wrote (1176)	2/22/2001 10:37:18 PM
From: ahhaha	Respond to of 24758

Thursday February 22, 9:00 pm Eastern Time Former U.S. Treasury Sec Rubin says defer tax cut CHICAGO, Feb 22 (Reuters) - Former U.S. Treasury Secretary Robert Rubin said on Thursday that President George W. Bush's $1.6 trillion tax cut package should be deferred until ``highly unreliable'' budget surplus projections can be better gauged. Rubin, who was revered on Wall Street during his tenure, painted an uncertain picture of the future for the economy. That was because he never did anything. That's the best any official can do. Maintaining fiscal discipline, a key to the U.S. economic expansion the past eight years, should be the first priority to keep from blundering down an economic path with a real chance of leading back to federal budget deficits, Rubin said in a speech prepared for delivery to the Economic Club of Chicago late on Thursday. The only way back to deficits is through the public re-electing Democrats. Five- or 10-year projections are highly unreliable, Rubin added, noting that Clinton Administration projections far underestimated the speed with which budget deficits could be eliminated. He served as Treasury Secretary from 1995 to 1999. ``I believe it is wise to defer the larger issue of what to do with the projected surplus a few years until the reliability of these forecasts can be better gauged,'' said Rubin, now chairman of the executive committee for financial services giant Citigroup (NYSE:C - news). In an opinion piece published in the New York Times earlier this month, Rubin branded the tax cut package ``a serious error'' that risked a slide back into deficits. On Feb. 13, Democratic lawmakers confronted Alan Greenspan with Rubin's words when the Federal Reserve Chairman delivered his monetary policy testimony before the Senate Banking Committee. Greenspan in January declared his support for the idea of tapping surpluses for tax reduction. U.S. House Speaker Dennis Hastert set a July 4 target date to enact the tax cut proposals, saying on Thursday that fast action was needed to boost the faltering economy. However, Rubin pointed out that virtually all mainstream economists say tax cuts this year would offer relatively little short-term stimulus which could be accomplished by a moderate, front-end loaded tax cut. The projected surplus over 10 years would be closer to $1.5 trillion to $2 trillion after stripping out Social Security surpluses, Medicare surpluses as well as reasonable judgments about defense and non-defense discretionary expenditures and about renewal of various expiring tax benefits, Rubin said. The tax cut would actually cost $2 trillion when including interest on the debt that would not be retired, he added. Rubin said the U.S. economy is well-positioned for the long run, but faces ``real risks and real challenges'' as the country undergoes an unwinding of natural economic imbalances created during the long expansion. The U.S. current account deficit now exceeds 4 percent of the economy, This is false. The current account deficit is running $110 billion. In a $10 trillion economy that's 1.1%. personal savings rates are near zero Upon what is this claim based? Failure of Americans to buy Series E government bonds? He needs to go back to econ 101 and learn something with the CBOT air heads. Rubin always was an air head. He succeeded by being invisible. and corporate and consumer debt as a percentage of the economy are at about the highest levels in 25 years, Rubin said. This is false. Consumer debt as % of GDP in 1980 was about 15% which it is now. Corporate debt has shrunk because the quantity of equity financing during the '90s was greater than in any period in history as a % of GDP.Total corporate fixed capital consumption has remained remarkably constant relative to GDP for decades. Corporations haven't floated the commercial paper or LT debt that they did in the '70s as a % of GDP even as inflation raged. Why would this guy make these false claims? They aren't false because they may be true briefly in the third digit. What's his true motive? Protecting his posterity. The Clinton Administration failed miserably to do what was necessary to maintain any kind of prosperity and the FED which is dominated by liberals aggravated the situation with interventionism. Now there is hell to pay. So Rubin is trying to do damage control and identify scapegoats so that he can hand wave away the grievous faults embedded by the big lie economy under Clinton, an economy with such a heavy tax burden that the national debt is evaporating quickly, a debt that was projected never to be amortized. Also, Rubin wants that extra money so that Democrats will be able to buy the people's votes by giving them more programs. Most private sector and public sector forecasters see the first two quarters of 2001 as difficult, followed by a rebound over the second two quarters, Rubin said. ``My view is that that may be the most likely scenario but, considering how all of the positive factors reinforced each other during the sustained good times of the past eight years, there is at least a reasonable chance that the excesses could set off the contrary process leading to deeper and longer difficulties,'' Rubin said. He added that a slowdown elsewhere in the world could worsen the situation, with Europe likely to slow, Japan facing ``very significant'' problems and emerging markets that are dependent on exports to the United States and Japan facing risks as well. So Rubin wants to shelve the tax cut. How will less final demand here help foreign economies which are benefiting from the prosperity here as evidenced by the current account deficit? A slowdown elsewhere will only happen with a slowing here, so how smart is not cutting taxes? This incompetent fool is playing the role played by Congress during the early '30s when Congress raised taxes to ensure a balanced budget.