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Politics : PRESIDENT GEORGE W. BUSH -- Ignore unavailable to you. Want to Upgrade?

To: DuckTapeSunroof who wrote (272147)	7/9/2002 6:12:01 PM
From: Neocon	Respond to of 769670

During the '80s, as growth accelerated, inflation decelerated. This means that it really was a supply- led boom. If demand had led the growth, prices would have been bid up. Additionally, despite the recession, inflation remained high, and only gradually came down over the next several years, which means that there was no "snap back" due to a low inflation, low interest rate environment. Federal deficits did not crowd out private investment, for the simple reason that a lot of it was in foreign hands (American bonds are the safest investment in the world), but also because America remained the best place to invest, and therefore attracted back all of those American dollars from Japan and Saudi Arabia and so forth, thus helping to fuel the economy. It turned out that all the dire predictions about deficits were idiotic fear- mongering. As for the decline of deficits mattering in the economy, well, the savings rate did not markedly increase, so I doubt that that was what pushed the economy up. Consumer borrowing did go up markedly, so there may be an explanation in the drop of interest rates. Besides, the adjusted figures are not as astounding as the earlier figures, and are close (less than a quarter of a percentage point) to the average annual growth rates of the later Reagan years.......