Krugman quality control worsens

Seth Ackerman SAckerman at FAIR.org
Tue Jul 25 09:01:00 PDT 2000


Michael Pollak wrote:


> It seems the most likely, if somewhat inadvertant savior (of the US
> economy from the burden of current account and savings adjustment) now on
> the horizon is Bush's 1.3 trillion dollar tax cut, which would drastically
> reduce the budget surpluses at roughly the right time to smooth the
> transition.
>

---

How would reducing the federal budget surplus help the current account deficit? The deficit is the excess of domestic investment over domestic saving. Lower budget surpluses would mean *even lower* national saving.

Seth



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