Magazine article Modern Trader

Poltics as Usual?

Magazine article Modern Trader

Poltics as Usual?

Article excerpt

Economic recovery in the United States should hit its stride about the time voters head to the polls to select a president in November.

While a modest pickup in economic activity is projected for the months ahead of the election, economists are split over whether the economy would fare better under a Democratic or a Republican administration.

The U.S. economy stands the best chance for sustained recovery under policies that would "bring down federal spending and either reduce or hold the line on taxes," says Jeffrey Given, an economist with Robert Genetski & Associates in Chicago.

Of the three presidential contenders, such an initiative is perceived to be most likely under President George Bush and the least likely under Arkansas Gov. Bill Clinton, he says.

|No New Taxes II'

After breaking his "no new taxes" pledge of 1988, it is extremely unlikely Bush will cave in to a push for major new levies, Given says. Clinton, on the other hand, would be expected to raise taxes to fund an expanded social agenda, he continues, and Texas billionaire Ross Perot has publicly stated his desire to increase taxes on upper-income individuals.

Progress on stemming the burgeoning federal deficit is important to long-term financial market stability, economists insist. But they warn heavy cuts in entitlement programs, such as social security, could rob the fledgling recovery of its vigor.

KeyCorp economist Jeff Thredgold says a case can be made that the impact of the presidency in 1992 "is less than we might naturally assume" due, in part, to the power of financial markets. …

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