To: Jill who wrote (35100 ) 4/1/2001 12:31:53 PM From: stockman_scott Read Replies (1) | Respond to <<In sum, the behavior of the US economy in the past five years seems to fit the description of a textbook Austrian School business cycle about as tightly as the glove fit O.J.'s hand. The dot.com investment frenzy and the miles of empty bandwidth smack of what the Austrians refer to as malinvestment. Much of this malinvestment would not have taken place had the Fed not created as much credit as it did in recent years. According to the Austrians, increased doses of created credit now will only postpone, at best, the inevitable liquidation of these malinvestments that must take place in order to set the stage for a new business expansion based on the solid foundation of saving, or transfer credit. Rather than the Fed printing more money, a policy option the Austrians would recommend to encourage saving and profitable investment is a cut in marginal income tax rates. This might not eliminate an economic downturn, but it would mitigate the severity of a downturn.>>
