I believe that it is the lack of inflation that has enabled the US Congress to spend as drunkenly as they have the last 15 years of so...
Make no mistake, this spending spree started during Clinton and has continued and even intesified under Bush...
Eventually, the overspending should be inflationary, but recently, it hasn't been...largely because of the huge trade deficit which has allowed our economy to grow, and grow, and grow... enableing full or near full employment while inflation has been almost non-existent...This along with ever increasing tax revenues (that a fully employed economy produces) just encourages Washington to spend more and more.
Eventually, the US trade deficit will reverse, and contrary to "conventional wisdom", that will be the 1st sign that the party in Washington is over. While it may be a good thing from an US manufacturer's standpoint, a trade surplus would be a sure sign that inflation is on the horizon. No longer would we be able to use cheap foreign goods and labor to keep inflation in a bottle.
Instead of using their $'s to buy US Treasury notes, the foreign holders of US Currency will poor their capital into US plants, equipment, products, and services. That will place an inflationary pressure on the US Economy that has not existed for the last 20+ years.
Current Events » in reply to Very good point
re: Drunken Overspending by Congress
The whole thread (37 posts)
- More economics
- Some Real Comparisons
- So Only Independents Can Read Graphs?
- I never say "me too". You were doing a good job and I had nothing to add.
- Okay, let's simplify:
- re: Some Real Comparisons
- So Only Independents Can Read Graphs?
- What BS
- War and deficit spending have been the last refuge of desperate politicians stimulating an economy. (n/t)
- Tax rate reductions spurring the economy and resulting in higher revenues is nothing new
- Some Real Comparisons