Japan's growing debt could wreck the world economy

Carl Remick carlremick at hotmail.com
Wed Feb 9 12:45:09 PST 2000



>isn't widely recognized that
>the U.S. deficit spending actually drove the world economy for a moment in
>the 80's?

This reminds me, what do the economists hereabouts think of Larry Summers' argument in favor of budgetary austerity -- i.e., that it is "reloading the fiscal cannon," as I believe he put it.

Columnist Gerald Seib expands on that theme in today's Wall Street Journal this way:

"If the government's debt is paid down when times are good, it should be easier to make the case to spend and even borrow later, when times go bad and the needs are greater. Here, there is dispute. Some liberals fear that, once balancing budgets and paying down debt become goals in themselves, it will be impossible to reverse course. But odds are the case for activist government will be easier to make once the government has cleaned up its books."

Actually, maybe this is a matter best analyzed by the list's psychologists (caveat: if the concept of delusional states crops up in your commentary, please avoid using the term "psychosis" to avoid inflaming list sensibilities needlessly).

Carl ______________________________________________________ Get Your Private, Free Email at http://www.hotmail.com



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