Economic Recovery - *WHY*?

[Platypus]

Let's say, for the sake of argument, that the economy is recovering. I personally think the signals are mixed and it's too early to tell whether this is just a "rebound effect" but let's assume. There are multiple reasons why the economy might recover. Some might serve as validation of certain economic theories, or justify giving the Bush administration credit. Some would lead to exactly opposite conclusions, and some are in between. What's your pet theory?

[Platypus]

Drat, meant to make this a poll, but then I noticed the "make this a poll" checkbox wasn't checked just as I clicked the "submit" button. Oh well. Here are some of the options:


Tax cuts.
Military spending.
Non-military deficit spending.
Normal business cycles or dumb luck
Finally seeing the effects from something X years before Bush.
Anything else.

[mataj]

Bush is pumping up statistics to get reelected. I bought US stock on NYSE during the last $ vs Euro dip. Will dump them immediately after elections.

[Djj1973]

Originally posted by Platypus
Let's say, for the sake of argument, that the economy is recovering. I personally think the signals are mixed and it's too early to tell whether this is just a "rebound effect" but let's assume. There are multiple reasons why the economy might recover. Some might serve as validation of certain economic theories, or justify giving the Bush administration credit. Some would lead to exactly opposite conclusions, and some are in between. What's your pet theory?

No one is disputing that the economy is recovering, just that it is not happening to either the right people or for some fast enough. In General, the less Government intervention is better for the Economy.

[Missouri Mule]

The economy is going to go up at least in the short term. Long term is more problematical with the huge deficits. Bush has put himself out on a long limb with the Medicare bill.

Just keep your eye on the stock market and what Greenspan says.

[gopman]

Actually the long term outlook is good. A large amount of this deficit is going to pay down national debt at lower interest. In addition, as a % of GDP it's actually not that big- 5%. With our low taxes, there is a large enough supply of loanable funds to keep our economy going, especially because many foreign nations invest in the United States. There are strong deflationary forces at work, so there doesn't seem to be a problem there. Due to the large amount of military spending by the government, the deficit is large, and we will grow more slowly than we would otherwise, but hey, we're at war. I've actually heard it proposed that our deficit is stabilizing the economy by preventing a quick expansion-recession cycle, but I don't buy into that, because I think we're restructuring our domestic economy, and such growth is to be expected without necessarily leading to overspeculation.

Long term problems may arise from medicare and SS. Bush is implementing private retirement funds to partially replace SS, but I think he also needs to phase the program out altogether.

As for my pet economic theory, I think everyone knows I favor a supply side policy.

[cpwill]

combination of regular market-fluctuation and tax cuts.