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Mavdog · 08-06-2004, 10:58 AM

This is why I preached caution when proclamations of a"boom" echoed from Bush supporters.

Clearly we have an improved economic situation from where we were in 01/02. The actions of the Fed to make debt cheap has proven to help both personal and business investment/consumption bring us out of the economic downturn. What we need to face today is that the personal consumption side is pretty tapped out, unless one believes that household debt should be higher (I certainly don't, esp. with the costs of that debt rising). We can't depend on the consumer as we have the last couple of years.

That dictates the need to encourage business expansion/investment, and with the costs of financing already low the only tool is to use tax policy. With our government currently running historically high deficits with no end in sight, this is going to be a very difficult to accomplish, for to grant business the tax breaks to encourage the investment needed to spur hiring the deficit will only go higher in the short term.

I think the word for this is a conundrum.

08-06-2004, 10:58 AM	#3
Mavdog Diamond Member Join Date: Jan 2002 Location: Texas Posts: 6,014	RE:New jobs slowdown This is why I preached caution when proclamations of a"boom" echoed from Bush supporters. Clearly we have an improved economic situation from where we were in 01/02. The actions of the Fed to make debt cheap has proven to help both personal and business investment/consumption bring us out of the economic downturn. What we need to face today is that the personal consumption side is pretty tapped out, unless one believes that household debt should be higher (I certainly don't, esp. with the costs of that debt rising). We can't depend on the consumer as we have the last couple of years. That dictates the need to encourage business expansion/investment, and with the costs of financing already low the only tool is to use tax policy. With our government currently running historically high deficits with no end in sight, this is going to be a very difficult to accomplish, for to grant business the tax breaks to encourage the investment needed to spur hiring the deficit will only go higher in the short term. I think the word for this is a conundrum.