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Politics : Formerly About Advanced Micro Devices -- Ignore unavailable to you. Want to Upgrade?

To: TimF who wrote (142851)	2/20/2002 3:59:19 PM
From: tejek	Read Replies (1) \| Respond to of 1578305

It is often said that deficits are not good because they crowd out private investment as the money goes to the government through borrowing. That's only part of the problem........gov't borrowing makes money expensive, meaning that the private sector has to pay more borrowing costs. Oftentimes it makes private sector project investment cost prohibitive and the projects get deferred. So its not an apple to apples comparison. This is true but government spending even if paid for by taxes has the same effect on the private sector, it can be borrowed away or taxed away but either way the government is taking a bite out of the private sector. Deficits become worse when they get so big that the government has problem making the payments, but otherwise they are not more harmful, then tax financed spending. Its the spending that is the problem however it is financed. I disagree......gov't spending is not as efficient as the private sector when it comes to certain areas of the economy......you want the economy stimulated, let the private sector do the work. A very real example how cheap money can keep the economy going can be gleaned by watching what's happening right now. Cheap money made it possible for GM et al to offer 0 financing on their cars and trucks, creating a great swell of buying last fall. And cheap money is keeping the housing boom going forward. Without those two props, the economy would be in a lot worse condition. Bush can thank his lucky stars that the liberals knew what they were doing. ;~)) ted