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Subject:  Re: OT (?) Hidden War Costs Date:  1/18/2005  7:56 AM
Author:  SuisseBear Number:  11636 of 36716

Kudlow shows how the economic expansion from the President's tax cuts are increasing tax revenue and decreasing the deficit. Any comments on that?

Behind the smokescreen, cutting taxes will result in higher debt. Yes, rising debt fuels the economy (more abroad than domestically), up to a point. Oh, let's not even talk about financial implications of Iraq (and perhaps Iran).

However, the efficiency ratio is sinking inexorably. Last figure I read a few days ago is that you now need $7 in debt increase to raise GDP by a single dollar.

The end is quite predictable: even if (mostly strategically/ politically motivated) "creditors" keep buying US debt, at some point the US and its citizens will be entirely burned out, and without a manufacturing base. Only an unservicable debt mountain will remain, to be reneged or inflated away...


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