Who Can Profit From A Deficit

[atabuy]

A thought just came to me and I would like to see how others might look at this.

When Clinton was President and they were balancing the budget, interest rates went down to record levels and the housing boom happened.

Of course this was terrible for people who had scads of money because they made so much less in interest.

Could it be that lowering taxes for the rich and sending the country into huge debt was a plan to get interest rates back to levels that the rich can again make unearned income off of?

The plan is so simple and maybe just overlooked by the average citizen who is not considered elite.

Any thoughts?

 

[bwipilot]

The only thing simple is your analysis. More deep questions would involve--why did the economy do so well? Productivity, welfare reform, lack of international conflict. What determines our interest rates? The fed sets them to insure low inflation. Actually, during the Clinton administration interest rates were much higher--because of the strong economy--in an effort to stem inflation. Why was the budget balanced? Because the economy grew so fast tax receipts also increased faster than the federal budget. The federal budget certainly didn't shrink under Clinton--even with a Republican congress. The whole bunch in D.C. get reelected by spending money/directing it to their voting blocs. Last of all--CDs never make a lot of money because their rate is mostly determined by inflation rates. Hence, 1% inflation--3% interest, 10% inflation--12% interest. Hence, the fed works to keep inflation low and help the rest of the economy--it will never really fuel interest income.

As an aside--what did Clinton ever do in his eight years besides enjoy the ride? I can't think of a policy he initiated, led, and enacted that's made our economy/country better. Of course, I must admit he didn't do anything to mess it up either and did allow congress to pass welfare reform--the only thing done that's held to be good legislation of the 90's. I am a conservative--hence easily forget what good things he may have done. Feel free to list things Clinton did for our country besides "feel our pain" or give good speeches/press conferences.