RE: C/G economic record again!

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From: Zhang, Yangkun (Yangkun.Zhang@FMR.COM)
Date: Tue Oct 17 2000 - 07:17:54 PDT

> thanks for your offer of "tons of stats" but just one will do. can you
> to a single act of this republican congress, something they defeated or
> enacted against the will of our President (aside from your conjectural

Yes, TRA 97 and the defeat of the Clinton health care plan.

> acrobatics) that led us directly to prosperity in 1994?

No, 1994 was not prosperous--the yield on the 30 year went by 200 basis pts.

> please, no citing of
> broad trillion-dollar-deficit-creating reaganomics - it's just too

Laughable? Is this everyone from Robert Mundell to Milton Friedman believes
in supply-side fiscalism? Or did you get a Nobel Prize as well? 1) If the
additional debt interest payment caused by the deficit is less than the
additional intake of revenue, then it is a good deal. This is standard
corporate accounting--cash flow matters, not debt! 2) if the percentage of
debt growth is less than the percentage of GDP growth (which it was), then
it was a good deal. The debt growth in the 1980s was far less than the GDP
growth. If a CEO can take on $1 worth of debt for every $2 worth of market
cap, he or she would be foolish not to take that gambit. All you have shown
is your total ignorance of accounting and economics.

> (incidentally, a rate hike in 1993 was no harbinger of economic disaster -

> it was an anti-inflationary measure directly following bush senior's brief

> tenure.)

This just shows how little you know about economics. I quoted the 30 year
yield, which the Fed has no control over. You're talking about the discount
rate. THEY ARE NOT THE SAME!!! They're at the two opposite ends of the yield
curve. The 30 year yield is a good market consensus of the long term
economic potential of the nation as the yield is set by market consensus,
whereas the discount rate is set by fed fiat. Before making economic
commentary, please make sure you at least understand fundamental concepts
such as the yield curve.

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