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Politics : GOPwinger Lies/Distortions/Omissions/Perversions of Truth -- Ignore unavailable to you. Want to Upgrade?

To: Bill who wrote (113378)	1/22/2008 3:37:26 PM
From: Kenneth E. Phillipps	Read Replies (2) \| Respond to of 173976

"The last time the U.S. was sliding into recession, in 2001, the country was sitting on a fiscal surplus of about $300 billion -- a war chest equal to about 2.5 percent of the gross national product. By 2004 -- after two large and unsustainable tax cuts and massive defense and national security spending increases -- that surplus had evaporated into a 3.5 percent GDP deficit. And while the overall deficit shrank after 2004, on a cyclically adjusted basis the structural deficit is very large now. So, unlike 2001 the U.S. cannot afford now a massive -- 6 percent of GDP -- fiscal stimulus like the 2001-2004 one." salon.com you need to run surpluses in the fat years to be able to provide temporary fiscal stimulus in bad and lean recessionary years.... We are now stuck in a situation where the room for any meaningful fiscal stimulus -- apart from a modest and temporary one like the one proposed by Summers -- is gone.