From: pjm@anegada.sps.mot.com (Patrick J. McGuinness)
Subject: economics, swedes, and fantasies (was Re: Bush is a ...)
Organization: Motorola Inc., Austin TX
Date: Mon, 14 Sep 1992 22:55:04 GMT

In article <1992Sep13.155656.12652@anasazi.com> john@anasazi.com writes:
>Keywords: 
>
>In article <1992Sep13.054606.20803@Princeton.EDU> niepornt@phoenix.Princeton.EDU (David Marc Nieporent) writes:
>]In <NEERI.92Sep11165255@iis.ethz.ch> neeri@iis.ethz.ch (Matthias Neeracher):
>]>In <BuD7sq.K08@apollo.hp.com> nelson_p@apollo.hp.com (Peter Nelson) writes:
>]
>]>>  Fans of Clinton/Gore high-taxes/government-investment/government-mandated
>]>>  worker-retraining/national-health-insurance would learn something by 
>]>>  looking at western Europe:  The average EC unemployment rate is currently
>]>>  9.5%.  At it's recent *low* in the 80's it got down to 8.3%!   In the 
>]>>  US, in what is one of the worst recessions in recent history it's "only" 
>]>>  7.8%.  (source: Business Week, current issue)  
>]
>]>Not all of Western Europe is high-taxes/government-investment
>]>government-mandated-worker-retraining/national-health-insurance. And Sweden,
>]>the country which probably fits these criteria best, had unemployment between
>]>1.4% and 2.8% through 1985-1990.
>
>Well, in that case why did Sweden vote out the socialists? Why has Sweden
>had to increase its interest rates to 75% (last week)?

Actually, the German bundesbank had a lot to do with this.

The German bank was trying to stem their own inflation, but at
a cost that was ready to send to world economy into a tailspin.
They were creating interest rates so high they forced other Europeans,
in order to support currency parities, to go along.
Anyway, I heard on the news today that the Bundesbank (finally) cut
their interest rates. The U.S. dollar jumped sharply higher today;
last I heard the stock market was up 65 points.
It's good news all around, as some of the other European countries
will be able to ease up on their own interest rates.

>]Further, this "high taxes" comment is unsupportable.  Even calling
>]Clinton/Gore policies "higher tax" would be weak, given that they have
>]proposed higher taxes on those making over $200k, lower taxes on others.
>
>No, what they have proposed are additional programs that will cost at
>least $150 billion per year. Now, that means they are either proposing
>vastly higher taxes, or a significant increase in the budget deficit,
>or are imagining that the economy will grow VERY fast.  Furthermore,

Clinton fantasy #1:
The wonderful Government programs will help grow the economy, which
in turn will pay for the cost of those same programs.
This circularity is utterly false, especially when there is no real
basis, except faith alone, that his proposed additional Government spending
programs will have any positive effect, let alone enough to offset
the increased deficit created.

>many prominent democrats (Clinton's allies) have publicly stated
>that our tax rates are too low and should be raised. Finally, Clinton's
>proposed tax increase on those making over $200k will make so little
>money that it is clearly a gimmick.

... and yet, his economic plan without any hint of sarcasm, fantastically
believes it will raise $89 billion. ...
As Newsweek says, this is economic fantasy.

Also, notice how the Clinton partisans never mention that Clinton
*has* proposed raising other taxes. These include the 'pay-or-play'
payroll tax and the increased business taxes that we will all end up
paying for.  

>Finally, from an economic point
>of view, increased regulation of business is equivalent to an increase
>in taxes (minus the benefit of reducing the deficit), and the Gore

Absolutely. A good case in point is the CAFE standards Gore and
Clinton want (except when their near an auto plant).
These will be quite expensive and cost quite a few jobs.

>style environmentalism (no disclaimed by Clinton) would entail
>a massive increase in environmental regulation - starting with a
>50 cent gas tax (which is, obviously, a tax increase).

Pat
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