Quote:
Originally posted by Spanky
It was 7.53 when Clinton got elected. It climbed to 8.8 in November 1994. The Republicans got elected in November 1994 and since the Republican Congress took control it has declined steadily to 5.4. In fact it really started to climb right after the 93 deficit reduction act was passed. Clearly the markets did not have much confidence in the accomplishements of that act. The market is not big on tax increases to solve the deficit problem.
I also seems like the deficit spending of the recent Congress has not caused a spike in the interest rates. It seems the markets understand this was what was needed to get the economy rolling again.
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Shockingly, there are other factors influencing interest rates besides the size of the US deficit. Like the money supply which, also shockingly, is somewhat higher now than it was in 1993.
Put differently, Bush has China to thank for keeping the US afloat, and Bush has left us a bit more vulnerable to the Chinese government than I, for one, feel comfortably with.
And while I would never, ever question the wisdom of the market with you --- after all, this is the same market that determined that companies like Webvan and Red Gorilla were worth umpteen billion dollars --- I would suggest that anyone who bet against the deficit reduction act lost.
Or, is it your position that the surplus would have been exactly the same size if government revenues had not increased? (Wait, let me guess -- the Clinton tax increases stifled enterpreneurs and prevented the US from seeing any economic growth in the 1990s -- right?)
