In article ,
"Robert Green" wrote:


I might buy that if there had been more than just 3 or 4 years of
non-deficit spending since the time of Nixon. The only time there was an
extended surplus, it was because the economy was so breathtakingly
overheated because of cheap money and growing money supply that money
came in even quicker than both parties could put it out.

I might accept that view if there had not been the creation of an entire new
sector of the economy based on personal computers during the time everyone
was (wrongly) giving *all* the credit to Reagan's tax cuts. PC related
stuff was being made and sold at prodigious rates. There was a bottomless
demand for programmers and support specialists. The problem came afterward,
when (as you've noted previously) people started to budget based on the
super-good times always being super-good. No one thought the party could or
would ever end.
We are not that far apart since I attribute that what I have called
the Greenspan/Gates expansion. The first G as a proxy for the long time
of really low interest rates and the other G as proxy for the great
leaps in productivity brought about by the computer. I don't think it
was as much related directly to PC sales and service and programming
(although it helped) as it was to the record changes in productivity.
That are still on going. If you look at manufacturing, for instance, we
haven't lost any manufacturing capacity, we lost manufacturing JOBS.
Why? Extended period (that still continues) where mfg productivity rose
at twice the rate of the rest of the economny.


The housing bubble, on the other hand, created no new real estate, it just
horribly overvalued the existing supply. The wealth created by the PC
revolution was real. The alleged wealth created by an overheated real
estate market feeding into a voracious securitization machine that put too
much distance between borrower and lender was *not* real. It was a spec
bubble. One that various government policies of both Bush and Obama is
keeping alive far longer than is good for the country. The real estate
market needs to coalesce before people feel comfortable selling their houses
to move elsewhere for better job opportunities.
And that took around 30 years and numerous administrations to do its
worst. As I mentioned in another thread, I was Ft. Lauderdale a few
years ago and the REALTORS were complaining that there was too much
business and they wished things would settle down and take a breath.
When you have a money-hungry bunch like the Realtors saying it is too
overheated, you know you have a problem (g).


Using taxpayer money to gift AIG employees with outrageous bonuses should
have been the last straw. They whined and bitched, too, forgetting quite
quickly that they would have been OUT OF WORK without government help.
That's gratitude for you.

Nah that's what happens when you get an entitlement. Which is another
reason the bonuses aren't going away. (Another indication of why
Congresses shouldn't put in their nose where they don't understand the
consequences.

--
"Even I realized that money was to politicians what the ecalyptus tree is to koala bears: food, water, shelter and something to crap on."
---PJ O'Rourke