RE: Gore the Eliminator

[Clifford Poirot <cpoirot@xxxxxxxxxxx>]

Just to second Chris' comments (at least partially) and add a few of my own.
As I've indicated, surpluses at high employment high growth can act as
automatic stabilizers. I will note however Randall Wray's most recent short
article in the Levy Institute newsletter did give me pause to rethink some
of my views about current fiscal policy and inflation. On the other hand,
Randy may be totally correct as a matter of economic theory, and yet be
wrong as a matter of political economic necessity.

On the whole, I am far more concerned with the composition of government
spending and the reasons for incurring debt. Specifically, our budget is
still too top heavy with government subsidies to the defense lobby. This
money would be better apportioned on creating an
environmental-transportation complex (environmental clean up and bullet
trains). As we did with the railroads in the 19th century, we could issue
long term bonds to finance construction of a national, high speed bullet
train network and inter and intra-city train, subway and bus links.

-----Original Message-----
From: Christopher Niggle
To: Sven R Larson
Cc: pkt@xxxxxxxxxxxxxxxx; niggle@xxxxxxxxxxxxxx
Sent: 9/7/00 1:29 PM
Subject: Re: Gore the Eliminator

Sven:

If we believe in the "balanced budget hypothesis," a large balanced
budget
can stimulate an economy as much or more than a deficit at a lower level
of expenditures with respect to the size of GDP.  Balanced budgets are
not
necessarily bad.  Surpluses,however, can be bad, with respect to
reducing
overall AD level.  Probably, most of us don't think that the surpluses
will actually obtain.

Chris

On Wed, 6 Sep 2000, Sven R Larson wrote:

> Quoting New York Times on the web today:
>
> "The Gore campaign issued an economic blueprint for the next decade,
> including a $300 billion rainy day fund and a commitment to eliminate
> the national debt."
>
> I'm having increasingly bad feelings about the fiscal policy that Gore
> is committed to. The article related to the above quote indicates that
> Gore is in to some clearly designed spending commitments. Europe has
> learned the lesson over and over again that when spending
commmitments,
> handed out wholesale and retail, are up against equally bold
> budget-balance attempts, it is always the spending commitment that
> yields.
>
> I've been told that Gore's commitment to balancing the budget
shouldn't
> really be taken seriously. Well, that may be true, but it may also be
> wishful thinking by PKTers who just can't see themselves vote
> Republican...
>
> Big government is not necessarily bad government, but from a Keynesian
> perspective it is far better to have a small government in the event
> some politicians set themselves to balance the budget, no matter what.
> The bad effects of such balancing efforts can do more damage to a
> society as far-reaching consumer-access warranting privatization.
>
> I'm surprised so few on this list seem to be interested in this issue.
> (Clifford Poirot is a notable exception!)
>
>
> banbudgetsurpluses,
>
>
> /srl
>
> --
> Sven R Larson
> PhD; Assistant professor of economics
> Department of Social Sciences, Bldg. 22.2
> Roskilde University
> Pb 260
> DK-4000 Roskilde, Denmark
> Phone: (+45) 4674 2910
>