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Subject:  Re: Fed Cuts a Half Point Date:  11/6/2002  3:38 PM
Author:  kjkraut Number:  206048 of 2381073

I love it when people think that government has that much control over the economy. Revisit Macroeconomics. Only the Fed bank and the consumer (business, government <through spending>, or individuals) have any control over the economy. The consumer makes up 2/3 of the US economy. That leaves business and government to make up the other 1/3. The only thing Bush can do is spend more or give tax breaks that business or consumers can use. Which one do you prefer? Either way, it would be a small amount of cash.

Bush and the republicans can't win this one too easily. He spends more, the lefts and the media worry about budget deficits and the individual and small businesses worry about tax increases. He gives tax breaks, then lefts and the media worry about budget deficits some more.

This economy is going to take some time to recover. Business spending stays anemic and the consumer spending is starting to run out of gas due to jobs and credit concerns. Businesses have to pick up the relay baton from the consumer who has been keeping this economy above water for a long time. That means fear has to erode away and bad companies have to disappear. This is a slow process. Especially since capital was so abundant in the late 90's and 2000 that individuals purchased stocks that were not even making money. These individuals have lost a lot of money and no longer spend as much. Therefore, companies are afraid to invest in better equipment and personnel.

I think that Bush has done a fine job. Politicians whether Democrat or Republican do not help or hinder the overall economy all that much. The only gains or losses are made in sectors where the policies of each of the parties differ. Pharma, Defense and Energy will do well now that Republicans control congress. Individuals and businesses may spend a little more if more tax breaks are issued. But then that depends on the consumers willingness to spend that small amount.

Besides I am reminded that this whole economy thing actually stretches back to the Clinton era and a republican congress. Then there was a Democratic senate that didn't give too much insight when there was a Republican white house.

People make way too much about the economy when it comes to politics and the economic abilities of politicians.
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