In , Kurt
Ullman wrote:
In article ,
(Don Klipstein) wrote:
Spending lagged economic growth due to gridlock in government.
But spending stayed pretty much the same on a %age year-to-year
increase basis during that time. The GOP got a taste of pork and liked
it.
What happened was slower pork and impairment of tax cuts due to
gridlock, and we got a sustained lack of deficits.
The deficit lack was even sustained enough for some abolition of the 30
year treasury bond!
One thing I noticed: When there are big deficits, "The Fed" (Federal
Reserve Board) has more need to sell Treasury Bonds. Bonds sell better
when the economy is less favorable to inflation, as in slower. So I
suspect that when there are big deficits, "The Fed" needs to please bond
investors, who are scroogier than stock investors - bond investors with
major holdings outright enjoy recessions, and maybe more so "growth
recessions" (when GDP grows after inflation, but to an extent less than
population times labor productivity).
I have noticed that "Wall Street" likes to equate working class wage
growth with inflation! Also with bond holders enjoying anti-inflationary
economic slowdowns more than stockholders do - stockholders benefit when
the pie grows!
Interestingly enough, on a %age of year-to-year growth, there was a
time when it went down right after the GOP took over in '94. But by '99
the %age had returned to what it averaged in the 5 years before the GOP
took over.
As in late 1990's being a time when inflation was at a "tolerable"
level, the USA unemployment rate managed a post-Carter maybe post-Nixon
low, and with median income (whether individual or family and without
gender specification of breadwinner) after inflation adjustment going up,
as opposed to most of elsewhere post-1973 when USA had
rich-getting-richer-at-expense-of-everyone-else to have on-average
top-20%-income and to significant top-5% American individuals and families
grabbing most of the benefits of USA economic growth and growth in labor
productivity!
I blame he
1. Immigration policy giving loopholes to let in competition from the
south to wage competition for jobs where the wages are in working class to
low range.
2. Politicians from "The Right" giving us tax cuts (and spending cuts
to a lesser extent) and according deficits increasing/maintaining need
of "The Fed" to borrow by selling Treasury Bonds. Those sell better when
the economy is slowed more to reduce inflation!
We have met the enemy and he is us...
- Don Klipstein )