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Back to the macroeconomic ’90s? Lower deficits can again create more growth
The Hill ^ | 05.24.2024 | PHILIPP CARLSSON-SZLEZAK & PAUL SWARTZ

Posted on 05/24/2024 1:04:28 PM PDT by ChicagoConservative27

Washington’s addiction to deficit spending — a rare bipartisan habit — is unlikely to change, no matter the electoral outcome in November. A deep conviction exists on both sides of the political divide that fiscal consolidation, whether achieved through less spending or higher taxes, reduces growth.

What this political consensus misses, however, are situations in which the classic trade-off is suspended — when smaller deficits can counterintuitively deliver more growth. Today’s macroeconomic environment is ripe for such an approach.

Compared to the years before the pandemic, fiscal policy — government spending and taxation — has kept a foot on the gas. Deficits remain large, particularly given the economy’s health. At the same time, monetary policy via the Federal Reserve has kept a foot on the brake to slow the economy and rein in price growth.

(Excerpt) Read more at thehill.com ...


TOPICS: Business/Economy; Culture/Society; Government; News/Current Events
KEYWORDS: 90s; deficits; growth; macroeconomic
Wasn't that so called budget surplus with Clinton just BS?
1 posted on 05/24/2024 1:04:28 PM PDT by ChicagoConservative27
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To: ChicagoConservative27

Clinton just coasted on what Reagan created and only because Newt forced him to.


2 posted on 05/24/2024 1:09:11 PM PDT by Jonty30 (He hunted a mammoth for me, just because I said I was hungry. He is such a good friend. )
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To: ChicagoConservative27
Well, DUH! When the fed.gov soaks up all the free capital available for investing in productive enterprise, of course the economy suffers. Put a stop to that, and the economy will rebound.
3 posted on 05/24/2024 1:13:09 PM PDT by Chad C. Mulligan
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To: ChicagoConservative27
Wasn't that so called budget surplus with Clinton just BS?

Wasn't it accomplished by stealing the Social Security trust fund?

4 posted on 05/24/2024 1:15:23 PM PDT by Chad C. Mulligan
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To: ChicagoConservative27

PHILIPP CARLSSON-SZLEZAK & PAUL SWARTZ and The Hellish Hill - apologists for the current totalitarian regime in the White House.

FUGEDDABOUDDITT!!!


5 posted on 05/24/2024 1:17:10 PM PDT by Jim W N (MAGA by restoring the Gospel of the Grace of Christ (Jude 3) and our Free Constitutional Republic!)
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To: ChicagoConservative27
I worked one year as a policy analyst for the WA state Senate .

In that session, the budget committee forecasted a surplus. If you got in the way of a legislator running to the till, you got run over!

Being a “newbie”, I asked a long serving senator why the surplus was being spent rather than saved or to pay down debt, he said “If we don't spend it now, we won't have it next year”.

Macro economics, politics style.

6 posted on 05/24/2024 1:49:13 PM PDT by llevrok (“In a time of deceit telling, the truth is a revolutionary act.” ― George Orwell)
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To: ChicagoConservative27

reduce capital gains federally and on capital sequestered on, basically, foreign islands when repatriated and Boom!

American Economic Explosion


7 posted on 05/24/2024 2:02:32 PM PDT by Vendome (I've Gotta Be Me https://youtu.be/wH-pk2vZG2M)
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To: ChicagoConservative27

Lower deficits are deficits and the Debt increases with them. Th inflation is being maintained in the vain hope that cheaper dollars will reduce the real debt by paying it off in those cheaper dollars. Problem is, as deficits continue and money is created out of air those interests rates rise along with it all.


8 posted on 05/24/2024 2:34:11 PM PDT by arthurus ( covfefe Cn)
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To: Chad C. Mulligan

Changed the way SS “reserve” is carried on the books. It justified more spending with the same basic economy and guaranteed more inflation in the after time and higher debt.


9 posted on 05/24/2024 2:35:56 PM PDT by arthurus ( covfefe Pd)
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To: arthurus

Social security was to take care of widows and dependent children. It has morphed into a huge giveaway for politicians to buy votes. I paid into Social security for 60 years, but now we give one-half trillion dollars to a puppet dictatorship set up by Obama. Politicians are scum of the earth.


10 posted on 05/24/2024 4:13:34 PM PDT by Machavelli (True God)
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To: ChicagoConservative27

The late 1990s saw a huge boost in tax revenues due to lower capital gains tax rates and the millions of Americans who did conversions from traditional to Roth IRAs and paid the taxes on their previously tax deferred IRA contributions.


11 posted on 05/24/2024 4:18:59 PM PDT by Alberta's Child (“Ain't it funny how the night moves … when you just don't seem to have as much to lose.”)
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