From: richter@mcc.com (Charlie Richter)
Subject: Re: Investment or Consumption?  Which helps the economy more?
Organization: MCC, Austin, TX
Distribution: austin
Date: Mon, 28 Sep 1992 16:46:08 GMT

> There are no quick and easy fixes.  This is what separates the
> conservative investor/politician/etc. from the liberal investor/politician
> etc.  There are structural problems with our economy and they are going
> to take time to fix.  None of Clinton's (or yours, for that matter)
> proposals will address the structural problems.

I said in my very first posting that I'm not in favor of *any* tax
cut at this time.  I don't think we can afford it.  Taking that position,
I join other "liberals" like Phil Gramm.  I merely asked whether, if we
were committed to a tax cut, which proposal would be better.  You make
a reasonable argument for Bush's tax plan.  (I still like the other
proposal better, but I admit your argument makes sense.)

As to whose plan addresses the "structural problems", that's a matter
of debate, I guess.  Both candidates have said that it will take many
months for things to get better.  As far as I can tell, both believe
they are addressing structural problems.  And economists, CEOs, and
Wall Streeters are hardly unanimous about what needs to be done, so I
think it's fair to say that no answer is obviously the right one.

> Most of Clinton's
> proposals are based on class-envy - that is, the rich have far too much
> money - and not based on sound economics.  I hate to point this out, but
> poor people don't own factories, they don't invest in the economy, and
> they don't hire millions workers.  The people Clinton is trying to punish
> =do= all of those things.

"Punish" is a pretty strong word.  One of the structural problems we have
is our huge annual budget deficits.  We have to curb those somehow.  For
all Bush's talk about limiting the size of government, his own budget
proposal -- the one he sends to Congress as *his* plan -- has come in at
about $300 billion in the red each of the past two years.  I personally do
not believe we can balance the budget without increasing taxes.  I wish it
weren't so, but I've looked at the numbers, and I just don't see how we
can do it.  And we would need phenomenal economic growth to "grow our way
out" of the deficit.  We had very strong growth in the mid-80's, and yet
Reagan wasn't able submit a single balanced budget proposal to Congress
during his entire term.  In fact, he didn't even come close.

So either you ignore the deficit, or you end up cutting spending *and*
deciding whose taxes you're going to raise.  If you raise the taxes on the
lower income levels -- the poor people who don't own factories, as you put
it -- I fear that we'll push more of those people into social programs and
end up spending more on those programs, at least in the short run.

(By the way, John, I read that, due to Hillary's success, the Clintons have
a fairly hefty income -- well into the bracket on which Clinton would raise
taxes.  If he suffers from class envy, he must be schizophrenic.)
-- 
Charlie Richter   MCC   Austin, Texas
  uucp: richter@milano.uucp     arpa: richter@mcc.com
"The panic ... was not due to anything fundamentally weak in either business
   or finance.  It was confined to the market itself."   - WSJ, Oct. 31, 1929