Re: Business Week discovers heterodox economics

["Harry Veeder" <eo200@xxxxxxxxxxxxxxxxxxx>]

Use the surplus for more rebates, more pay backs etc,
but not more tax cuts.

Anymore more tax cuts will send the US economy
into a deep depression and affect the rest of the
world.

70 years ago, increased tax cuts at the
start of a recession took the world into
a great depression. (In fact, I believe they
were responsible for making the great
depression so great.)

It doesn't matter if it is the "consumer" with
credit problems. Anyone who is granted credit is
an entrepreneur and *increasing* tax cuts is a very
bad idea at the start of a recession.


Harry Veeder


----------
>From: "William F. Hummel" <wfhummel@xxxxxxxxxxxx>
>To: pkt@xxxxxxxxxxxxxxxx
>Subject: Business Week discovers heterodox economics
>Date: Fri, Mar 30, 2001, 7:12 pm
>

>The following appears in the April 2nd issue of Business Week:
>
>               A CALL TO TRIPLE THE TAX CUT
>                   Surpluses may be dangerous
>
>Until now, it seems, the Democrats were united in the idea that
>taxes should be cut far less than the $1.6 trillion the Bush
>Administration proposes for the next 10 years.  But two new
>reports from economists at the liberal Jerome Levy Economics
>Institute argue that large and growing federal budget surpluses
>are an enormous drag on the economy - and that, in fact, the Bush
>plan is much too small.  Both reports, one by Wynne Godley and
>the other by Dimitri Papadimitriou and L. Randall Wray, call for
>cuts that are three times what the White House wants.  And that's
>a conservative number, says Wray of his $4.8 trillion proposal.
>"It could easily turn out to be too low."
>
>What worries Wray and his colleagues is that business and
>consumer spending, buoyed by record levels of borrowing, will
>fall sharply as the economy stalls.  That spending drop will be
>especially painful because economic growth is already constrained
>by huge and growing federal budget surpluses, revenue excesses
>that the Congressional Budget Office projects will rise from 2.4%
>of gross domestic product in 2000 to 5.3% of GDP in 2011 unless
>taxes are cut.  The result could be a serious and long recession,
>the authors say.
>
>The plan by Papadimitriou and Wray, which includes the Bush cuts
>but adds payroll-tax relief and expands credits for families, is
>designed to help the economy now and in the future.  In the near
>term, it offers about $450 billion a year to offset the expected
>cutback in household spending during the next few years.  Over
>the course of the decade, it brings government revenue in line
>with public outlays so surpluses don't continue to weigh down the
>economy.
>
>