"A form of looting"



  • See:
    http://www.spiegel.de/wirtschaft/0,1518,258983,00.html

    an interview with Nobel prize winner Prof. Akerlof about the fiscal policy of GWB



  • I think he’s absolutely correct.
    Many Canadians deplore Jean Cretien (Canada’s P.M.) for stating at the recent G8 meetings some similar things (i.e. it is unrealistic and dangerous for a member to have this kind of a deficit - especially in an increasing world economy where we all rely on each other to some degree). At the same time, i agree that this has the potential to be extremely problematic.
    At the same time, in periods of economic downturn - which the US has seen in spades (not the least of its causes were 9/11) - it is economically viable (and good sense) to run a deficit - the depth of which is difficult to determine. Presumably GWB has a few half-decent economists working with him. The problem is - are they saying “oh, great idea boss” to appease GWB, or because in their estimation it’s a good idea?
    As for his tax-cutting strat - i completely agree. Basic economic theory demonstrates that if you wish to stimulate the economy you have better growth by injecting money than by cutting taxes DOLLAR FOR DOLLAR. Also he’s correct by stating that the tax cuts to the poor would provide better economic stimulus than to the wealthy.
    Which brings us to ask - why these types of economic decisions? As i said - certainly he has the best economists in the nation helping out. Is he relying on political - rather than economical - advisors?
    (my guess is “yes”)


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