Remember... we went to war to secure Iraq's oil fields and bring home the loot. Surely we can squeeze 375 billion out of those oil fields.

The economy is (right this instant!;-) starting to change course and begin a recovery. Look for a better than expected Christmas to bring profitability back to some of the hurting retail sector and look for the weak dollar to strengthen US imports overseas while aiding domestic manufacturers at home.

The going will be tough, but we are going to pull through. It's surprising that the other western nations have been dragging their feet on Iraq. The potential to create a new market for western products and create a whole new generation of tech-savvy consumers is blatantly obvious to the entrepreneurial mind. Naturally, the bureaucratic mindset is in fundamental opposition to those things which may be good for business. If I were a French or German businessman I would be screaming my head off about the lost opportunities.

The world is a big place and there are still many economic opportunities available to the nation that seizes the moment. Multi-millionaires were made by the hundreds in the former USSR and east Germany after their rigid regimes fell. The same opportunities await in Iraq for the "adventure" capitalists.

The booming stock market paid singlehandedly for the last deficit in the form of taxes on trillions of dollars of stock. Let the stock market appreciate a little - let new "capital" be formed in the creation of new stock by new companies - and you have instant mega-income for the Treasury Department.

This exercise in deficit reduction was not lost on those savvy capitalist/economists who realize that you can erase a decades old deficit very quickly by hyping stock prices for three years. Essentially you plug in new wealth that didn't really exist (except on paper) tax it and it is almost like you are printing new money!

Again, it wasn't that the public became aware of the fraudulent dot.com activities and "billion dollar" companies with ten thousand dollars monthly incomes that brought about the collapse of the stock market...it was the taxes on those huge stocks that were due and that brought these many companies crumbling down scrambling to sell off large amounts of stock quickly to pay the millions owed the tax man. The bottom line is that the stock buying public (including foreign investors in US companies) collectively paid off the US deficit in about three years time.

The government made not only enough to plug the deficit before it all collapsed though, but enough to build the surplus that helped soften the blow of 9/11 and the conflicts in Afghanistan and Iraq - and it can easily do so again.

By cutting taxes and being pro-business, the Bush administration sets the stage for a bull market return. The stock share structure of many companies is huge now. The survivors of the last downturn have left a market where many, many more shares exist than did in the 80s or early 90s. When these inflate (generally due to misperception of value by the completely stock-ignorant, non-prospectus reading public) even marginally - the returns to the tax man are larger than they ever were. Stock-splits and all sorts of shenanigans to increase corporate value, pay taxes and make venture capitalists very rich were employed between 97-99. Many corporations (and particularly their newfound unscrupulous large executive shareholders) have learned better how to manipulate the market to avoid letting their large share amounts suppress stock value despite their inequitable relationship to earnings real or imagined.

Sorry for getting off the beam here a bit - but all these things are integral to understanding just how easy it is to plug a deficit and why the current deficit will be much easier to fix than it was to fix one in the 80s or early 90s.

SDAI-Tech1