[JackDanielsOldNo7]

“the longest economic boom in American history.”

The good economy only lasted about four years. That to them is long? Also, it seems that the economic boom was a fake. Note the dot coms that are now bust and look at the wrongdoings that have come out since then. Enron World com etc. Also has anyone noticed that the recession started in March 2000.

[massadvj]

I am one of the businessmen of whom he speaks, and he is not entirely wrong. Naturally, the best scenario is for government to cut and not spend. But given a choice between a tax and spend or a borrow and spend policy, the tax and spend policy is probably better for the economy over the long term. Here's why:

Borrow and spend will stimulate the economy over the short term by flooding it with cash. Everyone understands that. So everything will temporarily improve as more money chases fewer products. But speculatiors like me also see that over the longer term this is going to have the effect of causing inflation, low confidence in the currency, lower relative buying buyer on a global basis. So how will I hedge that? I'll buy gold, hard assets such as investment grade art and antiques, residential income-generating real estate leveraged with artificially low interest rates, foreign currencies, and speculate in stocks to capture the artificial bubble that will be created (always at the ready to bail on the first sign of inflation and increasing interest rates). What I won't do is take on fixed costs for my business, hire employees, or otherwise make long-term plans that may be more beneficial for society.

If the government's books are balanced, I will more likely take a long-term view in the expectation of a stable business environment. I will expand my business, take on more employees, etc. From a societal point f view, it's probably better for me to do this.

The ideal, of course, is for government to cut spending and taxes. But given the choice between tax and spend democrats and borrow and spend neocon republicans, the tax and spend approach is probably the better at maintaining a stable economy over the long run. The borrow and spend approach may kick-start a sluggish economy, but when you look at the spending -- farm subsidies, prescription drugs, education, etc -- you see that it cannot be reversed after the economy starts humming again. So you have to assume that the deficits are going to be as long-term as the new spending. Which of course means that government will be borrowing or printing money into the future.

Republicans used to understand all this. Remember when we supported a balanced budget amendment? It seems so long ago now.

Personally, though, I prefer borrow and spend. As a speculator, it's easier to predict what will happen next and you can build greater wealth over a shorter period without losing flexibility.

[WaterDragon]

ping!

[liberallarry]

...post-grad economics study in England, where Karl Marx wrote the Communist Manifesto The author should never have been allowed to climb out of the toilet.

[timydnuc]

Giving a politician, of either party, more money (in the form of taxes on us) is like giving a quart of Jack Daniels and the keys to your car to a 16 year old.

Greatest piece of philosophy I ever heard.

[TBall]

Rubin is in the past. Bush needs to quit spending so freaking much. I like Bush and all, but the increased government spending is ridiculous.

[Political Junkie Too]

With his educational and work-related background, he's the epitome of the modern Democrat. He stands against the evil corporations, and on the side of the working man.

There was this article from two days ago: Chicago: Banks Allow Mortgages to Illegal Immigrants.

A coalition including Citibank, Bank One, and 33 other banks—banded together as the New Alliance Task Force—are rolling out a model loan program meant to bring undocumented Chicago immigrants into the mortgage mainstream.

Clinton connections:
Citibank = Robert Rubin
Chicago = Rahm Emanuel

-PJ