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The Federal budget gap is a buy now, pay later sort of deal, the pay later is that the long term intrest rates will shoot up either sooner or later as the tresury is forced to issue more bonds to cover the growing federal budget gap.

All the pick ups one sees are due primarily to the home re-finance boom that had the meter pegged from July 2002 to June 2003 and the "tax cuts" as Stephen Roach has said are quite front loaded. The re-fi liquidity is going to run dry soon enough as the re-fi bubble has burst, as for the impact of the tax cuts, that hard to say when it will run its course, but like re-fis, tax cuts as far as the economy is concerned, is a impact that is largely a one time event since a tax cut may increase consumer and business spending compared to last year, but the year after that, they will have to find some other way to grow besides a tax cut.

Agree on the refinance; but disagree on the tax cuts being a one time item. There was a one time shot (refund) of funds into the economy, but as I understand it, we are in for a huge amount of money over a period of years. The time frame permits business to plan, budget and expand. BTW, the growth in manufacturing was accompanied by increased work week hours and some hiring. Once inventories are being brought up to "just in time" levels again, we will be OK.

BTW, even a "one time" shot is a good prime. The alternative is NO TAX CUT, THEY KEEP OUR MONEY. As far as the do gooders go, tax the rich (they define who is rich regardless of the local cost of living), I DO NOT SEE THEM VOLUNTARILY SENDING IN HUNDREDS OF THPOUSANDS OF THEIR OWN DOLLARS (over what is normally sent to their favorite charity, other than old clothes.)

Want to make a Degenerat throw up? Ask them how much of their own money they sent to the "poor" / "schools" / "Ad Nauseum" in an amount that would be equal to their "fair share" of the tax burden. The answer is $-0- and their causes are, by deduction, as worthless as their arguments.