[OPE-L:6095] Re: Re: falling profits

["Rakesh Bhandari"<rakeshb@xxxxxxxxxxxx>]

Patrick,
is military keynesianism back in vogue? before the end of the cold war,
military spending made up 6.2 percent of GDP (1986). By the end of Clinton's
administration it was down to 2.9 percent (2001).  I don't think George W. Bush
is willing to run deficits large enough to put military spending back up to its
old Reagan level. If there are to be large deficits, it will be as a result of
ever more regressive tax cuts with spending remaining fairly stable, I believe.
And there shouldn't be a great multiplier from regressive tax cuts. Which of
course is not to say that once that $2 trillion that is now in money markets
eventually comes out from hiding there won't be a sharp recovery in the US. I
do doubt however that the recovery will be strong enough to pull Asia and raw
materials exporters out of their impending depression.
Rakesh