Then you believe that deficit spending acts as aan economic stimulus... Which it does because of a multiplier effect...(Every dollar spent by the government creates 8-10 $'s spent in the private sector.)

Now walk with me:

If running a deficit stimulates the economy, what does a Keynsian model show that running a surplus does?

From a supply you are correct about lower interest rates...Its just a question of which has a greater stimulative effect in the short and long term...

When Greenspan raised rates despite the higher productivity that was happening all over the economy, he got in the way of the surplus that would have eventually slowed the economy anyway...

Again...Its all theory. I think it has some validity because of the rising productivity: Take that awaay, and I would agree with you.

Note: Productivity, globalization, and immigration to the US are just a few of the factors helping to keep a lid on inflation. The Fed doesn't need to raise rates as quickly as they might otherwise need to as long as these trends continue...On the Supply side we have plenty of willing labor to keep wage inflation in check, and where wages do go up, they are being driven by the higher productivity which makes the higher wages possible.

Scott Evil

P.S. and to think they laughed at Jack Kemp when he said you could grow yourself out of the deficit...Lets see who was he and Bob Dole running against??? Oh yeah...Clinton and Gore...