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

To: DuckTapeSunroof who wrote (390816)	4/12/2003 1:07:52 PM
From: DavesM	Read Replies (3) \| Respond to of 769670

There were things done by the Clinton Administration (the Administration had good arguments for making the changes) that may have enhanced the bubble. In the late 90's, Government changed the way Inflation (lower), GDP (higher), and Savings (higher) were calculated, which changed the economic numbers the Government reported. I believe the Government also changed the way they refinanced debt (more toward short term than long term obligations), lowering the yield on bonds, making stocks even more attractive. In the late 90's way that the Government calculated the rate of Inflation was changed. The calculation ALONE resulted in lowering the inflation numbers reported by the Government. "This difference implied an average annual increase of 4.28 percent instead of the 4.73 percent reported by the CPI-U. This was 0.45 percentage points lower — about the same magnitude as the Bureau had estimated in their 1998 CPI revisions." research.aarp.org Also in the late 90's, the Government changed the way that GDP and personal savings was calculated. This meant that GDP was suddenly being reported as higher than before...also just due to a calculation change. The way personal savings was calculated was also changed which resulted in the Governement reporting higher numbers for the household savings rate, than in previous years. "WASHINGTON -- The U.S. Commerce Department will unveil Wednesday changes in the way it calculates economic growth, concluding that heavy business investment in computer software means American economic output has been even greater in the 1990s than previously estimated. Government economists, scrambling to keep up with the ways that technology and deregulation have transformed the economy, will also announce they are increasing sharply their estimate of productivity in the banking industry, acknowledging that conventional benchmarks haven't adequately recognized the impact of the financial revolution over the past two decades. Officials will also describe at a news briefing how they are changing the way they calculate household savings, a technical move that could have big symbolic importance. The shift could mean that the official personal savings rate is actually positive, not negative as the Commerce Department has been reporting in recent months. A negative savings rate means Americans are spending more than they are earning, and the figure has been widely cited as a sign of rare weakness in the current economic expansion." users.ipfw.edu Also in the late 90's the Treasury began to reduce sales of 30 year Treasuries. This action resulted in a significant decrease in the yield for long term Treasuries, causing even more money to go to the Stock Market.