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To: GVTucker who wrote (168700)	2/7/2002 7:01:19 PM
From: D.J.Smyth	Read Replies (1) \| Respond to of 176387

GV. re inflation "...And, although I am definitely no fan of Daschle, thank goodness he is blocking this spending plan. Although without question his motive is definitely not good, still, the last thing our economy needs is the massive amount of pork that is in the Bush/GOP plan. Our monetary policy is so loose now the slightest imbalance will get inflation out of control, and that kind of government spending could easily be the trigger.We had the longest expansion in our history, and now we're paying the price, and it really isn't that steep of a price..." Carter's high tax and spend plan created unmitigated inflation and nearly ruined the markets. Reagan's low tax and spend plan calmed inflation, and spured the markets higher. There is little historical presidence for controlled government spending creating unmitigated inflation as long as jobs are created and taxes are held in check. Reagan's plan did create more govt. debt; but according to several studies it was market associations with this same "debt" that rallied the markets. If you correlate Govt. surplus with market activity, you'll determine that in such times of Govt surplus the markets didn't do well. One such notable time is the taxable year 1928-1929. Hoover was sitting on a moutain of surplus and failed to revitalize the markets with it in a timely manner. FDR came in, increased spending and revitalized the markets. Keynsian and Smith economics The issue is job creation; not retaining Govt. surplus. The retention of Govt. surplus may also help check inflation; but it does nothing for the market long term. "Controlled inflation" through job creation is what Bush is working for. Sen. Daschle is going to help ruin belief in this economy if he continues his tactics. He is helping no one.