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Politics : Politics for Pros- moderated -- Ignore unavailable to you. Want to Upgrade?

To: LindyBill who wrote (54385)	7/15/2004 10:49:31 AM
From: JohnM	Read Replies (1) \| Respond to of 793928

Do you remember Clinton raging against "those goddam bond traders in New York?" That was the key. He was unable to put in the deficit spending they had planned to pay for the welfare programs they had to cancel. He got a tax increase that kept the boom from being even better. The Republicans were strong enough to keep them from worse excesses. If you are talking about the 93 policy stuff, then you are just simply wrong. It wasn't welfare programs in 93, though it should have been; it was middle class tax breaks they wished to do. The tax increase in 93 made possible the boom since it led the bond traders, so the argument goes, to expect deficit reduction, which meant less borrowing, which meant lower interest rates, which meant lower deficits and more money for investment and consumer spending. The Republican take over of Congress hardly reduced spending; just changed its object. It went from support for government programs that supported education, serious health care programs, et al, to the usual fat cats of the Rep Party. Which is, of course, where the Bush tax cuts have gone. (You may recall the famous DeLay memo to Washington lobbyists about where to spend their contributions and what the rewards could/would be.) We both know how little the President has to do with the economy. The best thing they can do is get out of the way, as Bush did with his tax cuts. Perhaps you think so; not me. Those Bush tax cuts for the rich have increased the deficit, have increased the degree to which the federal government is funded by foreign bond investors, have increased the degree to which those interest rates are vulnerable to "runs on the bank" by both foreign and domestic investors as the debt keeps climbing. It's a strange day when Jim Cramer and Pete Peterson are on the same page. But they definitely are now. Very serious worries about the viability, short and long term, of all this.