On Fri, 5 Jan 2001, Mark Weisbrot wrote:
> If I had to explain the current expansion in a few sentences, I would
> attribute it to (1) the stock market bubble which generated some
> trillions of dollars of wealth and therefore hundreds of billions in
> demand from those enriched and (2) major change in Fed policy 5 and a
> half years ago, when they abandoned the 6 percent NAIRU and allowed
> the unemployment rate to fall to 4 percent.
How about the argument the (2) is the crucial mechanism -- that it caused a large part of (1) -- and that it was directly related to surpluses? I.e., that if we'd been running normal deficits, Fed policy would also have stayed the same, i.e., tight? Purely from the view of stimulating the economy (and not of needy people who are denied funds, or public infrastructure that deteriorates), if the net result is thus a wash between deficits and supluses, aren't we better off paying off the debt?
Michael
__________________________________________________________________________ Michael Pollak................New York City..............mpollak at panix.com