RE: Re: RE: Democratic Party Fiscal Conservatism

["Max Sawicky" <sawicky@xxxxxxxxxxxxxxxx>]

in a nutshell, Alan Greenspan and good luck.
they credit 'the policy mix,' including G-span,
for the 1993 bond market rally, and the rally
with kick-starting the economy, but they see
the interest rate effects wearing off in less
than two years.  The investment boom is much
later in the decade.

The direct effects of fiscal policy on the
deficit were not huge, quantitatively speaking.
Psychologically who knows.  Clearly the shift
from the pre-93 path, which was unsustainable,
to the post 93 one, should have been important.
(much more so, arguably, then a shift from
where we are now to zero debt).

But I have no explanation.  I don't do that stuff.
I only look for evidence pro and con the budget
deficit->interest rate connection so I can react
to claims made for and against fiscal policies.

max



Max Sawicky wrote:

>*  ascribing the 'fabulous 90's' to interest rate
>reductions, and the rate reductions to deficit reduction.
>The new book by Blinder and Yellen is pretty good testimony
>to the contrary, especially coming from them;  I think this
>part of the debate is winnable.

So what's their explanation, and the Sawicky explanation?

Doug