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Strategies & Market Trends : Waiting for the big Kahuna -- Ignore unavailable to you. Want to Upgrade?

To: HairBall who wrote (32654)	10/28/1998 9:03:00 PM
From: Haim R. Branisteanu	Respond to of 94695

Not only have economic and market growth slowed, but a period of lower health-care inflation -- which held down Medicare spending -- appears to be ending. And military spending, which edged lower this year on top of post-Cold War declines, probably will start increasing. "The surplus is going to vanish almost as quickly as it appeared," Zandi said. "We'll probably run surpluses in 1999 and 2000, but after that we're going to return to the red ink." www2.nando.net In a sign of things to come, perhaps, the Treasury Department said this week that it will need to borrow $30 billion during the October-December quarter, roughly double its projection of two months ago. Assistant Secretary Gary Gensler blamed part of that on a drop in corporate tax receipts. Most, however, came from a shift in interest rates, which caused state and local governments to buy fewer privately-placed federal securities, and a change in the timing of excise-tax collections, he said. But even economists optimistic about the short-term warn that policy-makers shouldn't feel a false sense of complacency about the long term. In a $520 billion, election-year spending package adopted this month, Clinton insisted that Congress spend $13 billion of the surplus on U.S. peacekeepers in Bosnia, aid to farmers and other programs. Congress added another $7 billion for defense. With a veto threat, Clinton blocked a Republican plan to cut taxes by $700 billion over the next decade, saying the surplus should be for Social Security. A $99 billion surplus in the Social Security trust fund this year masked the fact that the rest of the budget actually remained in deficit by $29 billion, notes economist Allen Sinai of Primark Decision Economics in Boston. Starting in 2011, after baby boomers begin to retire, the government projects the yearly Social Security surplus will disappear. "That's all the more reason to be cautious about any rush to disperse the surplus in any form," Sinai said.