Zeev's Turnips Talk Politics (ZTTP)

[Trader77]

HUGE debt

Peg, please explain how else we could have staved off an economic depression other than through deficit spending? How else could we have reflated the currency other than tax cuts? People don't realize how close the "Asian contagion" came to devastating our economy. Although the negative effects began 1997, it wasn’t until the 2nd Quarter of 2000 that growth began to slow. This roughly coincides with the tech bubble bursting and the NASDAQ crash. Look at a chart of the money supply and you'll see that it flat lined in the early to mid 90's. This was due to massive cuts in fiscal spending. Greenspan realized that this created a deflation threat and desperately tried to raise the money supply in the late 90's. After Clinton left office, the new Administration's spending policies and tax cuts revitalized the economy and began the reflation process, thus sparing the nation from the largest period of economic hardship since the great depression. This isn't speculation or economic theory. Through the clarity of hindsight, we know this to be true.