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Revisionist Economic View 1/24/2004 10:42:28 AM
I recently finished reading an article on the Davos Trade Forum, and the Views expressed induce me to write an alternate view of the Economy in short form.
A thesis can be advanced that expectation of the Bush Tax Cuts, in themselves, caused the Recession of 2001. A short view of Economic theory is necessary for evaluation of the thesis.
Business personnel will engage in marginal productivity measures, in order to obtain the Profits desired in a stable matrix of economic factors. Production at marginal productivity levels insists Product becomes more expensive to produce and market, with additional inputs of productive units of resource. This marginal productivity must incur the sharpest supervision by Management, because it is the most costly with the lowest margin of Profit.
The Bush Tax Cuts, or their expectation, incited Business leadership to cut back on its most expensive Production and Marketing efforts, as the Tax Cuts allowed for equivalent Profits without acute supervision and risk. The Tax Cuts could have quite well been the cause of the last Recession, and continuing these Tax Cuts will impede Business leadership from returning to marginal productivity; a necessary condition to illicit economic Boom conditions, the latter brought by resurrection of Consumer Demand in the Retail sector. Consumer Demand demands the creation of Jobs, and payment of the excess debt of Households. lgl
