Seattle PI
THE ECONOMY
More cuts in spending could make things worse
"Economy booms; now cut spending," advises a Nov. 26 editorial. Don't pull the trigger, the gun is pointed at your head.
You quote Lyle Gramley, former Federal Reserve governor: "The strength and breadth of the economy's growth are impressive. We've got enough going on now so that it's clear that this recovery is sustainable at a growth rate of about 4 percent."
Investment stagnates, unemployment is stuck at more than 6 percent. What exactly is strong and broad?
To call for spending cuts as you do is reckless and foolhardy. Much of this difficulty we're in now arises from the cutbacks in state and local government spending, which amplified the downturn. But cutting federal spending too will complete the capitulation to the rich, I suppose. (Keep in mind, there is no plausible level of spending cuts that would make a dent in the enormous deficit.)
Rescind the absurd tax cuts to the wealthy. Keep them in place for the poor and middle class, if you want, since this is what stimulates the economy, and it's not the bulk of the total tax cut bill. (In Washington, for example, according to the Institute on Taxation and Economic Policy, the top 1 percent of Washingtonians will get a $76,865 tax cut this year. It amounts to four times the total cuts for the 20 percent in the middle. The average cut for those in the middle 20 percent will be $987.) Take the savings, give it to the state and local governments so they can restore services and spending, or finance health care with it, like Dick Gephardt proposes.
This president has engineered a mess of historic proportions. Any recovery will be choked off by booming interest rates, because investment demand will have to compete with government demand for money in a climate of a declining dollar, which is pushing foreign capital overseas. Eventually, of course, the debt will force cutbacks in Social Security, Medicare and other necessary programs, cutbacks of proportions we are not willing to contemplate.
Alan Harvey
Seattle
Friday, December 12, 2003
Tuesday, October 14, 2003
Letter: Tuesday, October 14, 2003
The PI
THE ECONOMY
Someone is dealing in purposeful deception
For the first time in six months, there was not a minus sign in front of the job-growth number. And the stock market is up. Still, after throwing trillions of dollars at the economy, a good chunk of it in the form of tax breaks for wealthy stockholders, you'd think we would get a little better headline than "Market to be static for the rest of the year."
We were promised a lot better by Bush & Co. Is this another case of purposeful deception? Strength in the U.S. economy is as hard to find as WMD in Iraq.
Alan Harvey
Seattle
THE ECONOMY
Someone is dealing in purposeful deception
For the first time in six months, there was not a minus sign in front of the job-growth number. And the stock market is up. Still, after throwing trillions of dollars at the economy, a good chunk of it in the form of tax breaks for wealthy stockholders, you'd think we would get a little better headline than "Market to be static for the rest of the year."
We were promised a lot better by Bush & Co. Is this another case of purposeful deception? Strength in the U.S. economy is as hard to find as WMD in Iraq.
Alan Harvey
Seattle
Wednesday, February 19, 2003
Letter PI Wednesday, February 19, 2003
TEFLON ECONOMIST'
Greenspan put U.S. economy on the ropes
The P-I's Editorial Board joined in the rebuild of Alan Greenspan's reputation in its Friday editorial. Greenspan is truly the Teflon economist. Forgotten on the other side of Sept. 11 is the Fed chairman's nonsensical raising of interest rates throughout the year 2000. Combined with exploding energy prices that year, his much-criticized action put the economy on the ropes.
Now we are all finding out that it's easier to stop an economy with interest rates than it is to restart one. It appears the politicians were right in 2000 -- at least the Democrats. They were right, too, according to many, when throughout the Clinton years they argued for lower rates while Greenspan clung to the outmoded formula that says low unemployment means high inflation. Unemployment sunk to near 4 percent under Clinton without inflation becoming a problem. In spite of the absence of evidence for his premises, Greenspan kept real interest rates high. I guess this is what the P-I means by "consistent."
Direct assistance to the states is the best policy. It saves their much-needed services and boosts aggregate demand in a straightforward and effective way. The tax cuts only boost deficits. Or are we going to stand by with the P-I and Greenspan, waiting and wondering if, when and for how long the Fed's zero interest policy is going to work?
Alan Harvey
Seattle
Greenspan put U.S. economy on the ropes
The P-I's Editorial Board joined in the rebuild of Alan Greenspan's reputation in its Friday editorial. Greenspan is truly the Teflon economist. Forgotten on the other side of Sept. 11 is the Fed chairman's nonsensical raising of interest rates throughout the year 2000. Combined with exploding energy prices that year, his much-criticized action put the economy on the ropes.
Now we are all finding out that it's easier to stop an economy with interest rates than it is to restart one. It appears the politicians were right in 2000 -- at least the Democrats. They were right, too, according to many, when throughout the Clinton years they argued for lower rates while Greenspan clung to the outmoded formula that says low unemployment means high inflation. Unemployment sunk to near 4 percent under Clinton without inflation becoming a problem. In spite of the absence of evidence for his premises, Greenspan kept real interest rates high. I guess this is what the P-I means by "consistent."
Direct assistance to the states is the best policy. It saves their much-needed services and boosts aggregate demand in a straightforward and effective way. The tax cuts only boost deficits. Or are we going to stand by with the P-I and Greenspan, waiting and wondering if, when and for how long the Fed's zero interest policy is going to work?
Alan Harvey
Seattle
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