Re: Fred Bergsten on war and boom

[Sven R Larson <slarson@xxxxxxxxxxxx>]

This is what Bergsten is actually saying (translation below):

> Aber man muss bedenken, dass das gut für die Wirtschaft ist. Das sind
> zusätzliche Staatsausgaben, eine Art keynesianischer Stimulus. Wir
> haben keine Vollbeschäftigung, und wir haben auch kein ein
> Inflationsrisiko. Die Ausgaben sind also ein Impuls für die US-Wirtschaft
> und werden die Wirtschaftsleistung sowohl in den USA als auch in der
> Welt erhöhen.

"But you have to keep in mind that [the cost of the war] is good for
the economy. It is ... a keynesian stimulus. We do not have full
employment nor do is there any risk for inflation. The spending is
also an injection for the US economy and will increase the level of
economic activity both in the US and in the rest of the world."

He is disregarding the deficit spending that the federal government
has already initiated, and tries not so subtly to claim that any
positive effects of the deficit to come will originate in the war
spending.

Bergsten also forecasts improvements in consumer confidence. Well,
that's not a very risky prediction to make right now. Just as it's not
very risky to predict sunshine after rain. Another forecast by
Bergsten is a further fall in the oil price. Even Rush Limbaugh got
that one right, although he actually did it before the war and way
before Bergsten. As a matter of fact, about the already initiated net
tax cuts, Bergsten says...

> Allerdings könnten die massiven
> Steuererleichterungen, die die US-Regierung gerade plant, langfristig
> ein Haushaltsproblem schaffen.

...that they over the long term could be a problem to the economy.
Apparently Bergsten is not a Keynesian.

Bergsten also gives a statement on military industry investments that
to me seems inaccurate at best, purposely false at worst.

/srl

g kohler wrote:
>
> Economist Fred Bergsten (USA) predicted that the war against Iraq will lead
> to an economic boom for the United States and the world economy. (Interview
> in Tagesspiegel (daily, Germany), 24 March 03) The arguments are along lines
> of military Keynesianism. I submit that an ecological post-Keynesianism (for
> sustainable global, national, and local development) would be a much better
> deal for the world and would not require war(s) for creating boom(s).
>
> Gert
--
Dr. Sven R Larson
Department of Economics
Skidmore College
815, North Broadway
Saratoga Springs, NY 12866
(518) 580-5278