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>If the economy slows down as it is now forecasted, Federal tax revenues
will
>likely come up short. In making their forecast, the politicos in D.C. have
>assumed that the business cycle is dead. It's not.
Actually, the CBO and the BEA have both been pretty conservative in their
forecasts of the economy, using a projected growth rate of around 2.5%.
This is why we suddenly have a surplus three years ahead of schedule.
>Also there won't be the capital gains tax money rolling in either.
Good point, I'll have to see how much this could impact the numbers.
>And don't forget the Japanese, they could conceivably repatriate some of
their money (sell Treasuries) to shore up their battered system.
>
This has been a distinct possibility for years now, but it never happens.
Doing so would send the dollar falling sharply, which would only make their
situation worse. But then again, it wouldn't be the first terrible decision
they made...
Bruce
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