[Previous string shifted to end]
>Date: Thu, 2 Dec 1999 13:31:15 -1000
>From: "Viviane Lerner" <[EMAIL PROTECTED]>
>Subject: What's Been Powering the U.S. Economy?
>
>>From The Left Business Observer
The current (Nov) issue of ER, the monthly newsletter of COMER reiterates
the comments below that the U.S. economy is being powered by increases in
the money supply.
The unexplained budetary surpluses (below) are also explained as the (now
3rd year) commencement of capital budgeting. For anyone interested in a
lucid explanation of current economics both national and international the
ER is must reading.
Regards
Ed Goertzen
=======
>http://www.panix.com/~dhenwood/LBO_current.html
>
>An obsession of this page has been figuring out what's been powering the
>U.S. economy. Conventional explanations, like the wondrous flexibility of
>our labor markets, don't convince, since these features haven't changed
>profoundly from the time when our major economic rivals were outgrowing us.
>Technological miracles don't persuade either, since there's little
>difference between productivity growth in the U.S. and the famously stagnant
>EU - and there's strong evidence that almost all the reported improvement in
>U.S. productivity figures in recent years can be traced to the computer
>industry alone. Outside computers, economist Robert Gordon estimates that
>productivity performance in the late 1990s is worse than the 1972-95
>average. To anyone schooled in Keynesian economics, the expansion has been
>particularly puzzling because it's happened despite substantial fiscal
>tightening - the budget deficit, almost 5% of GDP in 1992, was transformed
>into a surplus of 1% in 1999, a massive shift that might have been expected
>to render an economy torpid.
>
>So what's been driving it? LBO's preferred theory has been the growth in
>debt. That theory, and then some, is nicely developed in a paper by Wynne
>Godley, published by Bard College's Levy Institute (www.levy.org). To
>Godley, the U.S. economy is characterized by seven unsustainable processes.
>
>These are:
>
> 1) the fall of private savings deeply into negative territory;
>
> 2) the rise in the flow of lending to the private sector (with 1) and 2)
> jointly meaning more borrowing and less saving);
>
> 3) rapid growth in the money supply (the trace of all that borrowing
> entering the spending stream);
>
>4) a rise in asset prices - mainly stocks - at a rate far in excess of
> growth in GDP or profits (which contributes to confidence, but provides
> no fresh cash, unlike incomes earned in production - money taken out by
> selling stock can only be replaced by fresh buying);
>
> 5) the rise in the federal budget surplus;
>
> 6) the rise in the current account deficit (the deficit on trade and
> investment income the U.S. is running with the outside world, which
> adds to our foreign debt); and
>
> 7) the rise in U.S. foreign debt (when domestic savings fall, and
> domestic borrowings rise, the shortfall can only be made up from
> abroad).
>
>In other words, while the U.S. government has grown prudent, the private
>sector hasn't: both households and businesses are spending more than
>their income (the income of businesses being profits).
>
>- --
>
>
> .............................................
> Bob Olsen, Toronto [EMAIL PROTECTED]
> .............................................
>
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Date: Sun, 5 Dec 1999 14:25:41 +0100
To: [EMAIL PROTECTED], [EMAIL PROTECTED]
From: "S. Lerner" <[EMAIL PROTECTED]>
Subject: What's Been Powering the U.S. Economy?
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>Date: Fri, 03 Dec 1999 16:07:05 -0500
>To: [EMAIL PROTECTED]
>From: Bob Olsen <[EMAIL PROTECTED]>
>Subject: What's Been Powering the U.S. Economy?
>Mime-Version: 1.0
>
Peace and goodwill
Ed Goertzen,
Oshawa,
L1G 2S2,
905-576-6699
+++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SIGNATURE - About bureaucracy "�.it ceased to be merely a servant of
social institutions and became their master. Bureaucracy now not only
solves problems but creates them. More important, it defines what our
problems are - and they are always, in the bureaucratic view, problems of
efficiency." "... this makes bureaucracies exceedingly dangerous, because,
though they were originally designed to process only technical information,
they now are commonly employed to address problems of a moral, social, and
political nature." "... bureaucracy has broken loose from ....
restrictions and now claims sovereignty over all of society's affairs.
"Technopoly" by Neil Postman 1992 Pp. 86
+++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
