Tuesday, April 19, 2005

The Washington Monthly

The Washington Monthly: "here's the real reason I think a Democrat will win in 2008: the economy. I'm not sure what will happen with Iraq or the culture wars, but the economy looks to me to be headed for disaster. Four years after the 2001 recession, the labor market is still slack and economic growth is mediocre, despite massive amounts of conventional fiscal stimulus. The budget deficit is out of control, and Bush is plainly not serious about reining it in (the first priorities of his second term have been Social Security privatization, an energy bill, and estate tax elimination, all of which would make the deficit even worse). The housing bubble is likely to end soon and rising interest rates have already killed off the refi boom — which in turn will tighten the spigot on consumer spending. The current account deficit continues to skyrocket, and rising oil prices will likely make it even worse. As Paul Volcker wrote a week ago, current economic circumstances 'seem to me as dangerous and intractable as any I can remember, and I can remember quite a lot.'"

Nicely summarized there, Kevin. The Coming of the Perfect Storm

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