Newspaper article The Christian Science Monitor

America the Dominant

Newspaper article The Christian Science Monitor

America the Dominant

Article excerpt

Merrill Lynch economists had a little fun the other day. They gave the United States economy a report card. As one might expect, it got an overall grade of A plus.

Well it should.

In January, the US economic expansion will match the previous longest upturn - that of the 1960s during the Vietnam War. In February, the expansion will be 107 months old - the longest ever in the US.

Commenting on specific economic "subjects," the brokerage house analysts noted that inflation is "absent." The Federal Reserve is "still ahead of the curve." The stock market "up, up and away, at least for tech stocks. The rest of the market, however, is down for the year."

As for the consumer, Merrill Lynch gives that topic a smiley face. Employment gets a "help wanted" sign. And fiscal policy? Federal budget surpluses "as far as the eye can see, or at least until the next recession."

The dollar is shown lifting a heavy barbell - strong versus the euro, weak against the Japanese yen, basically "holding its own."

Nor do most economists see an end soon to the expansion. Merrill Lynch, for instance, expects 3.8 percent growth in gross domestic output in 2000, barely lower than the approximately 4 percent increase in the output of goods and services in 1999.

Behind this happy economic picture is a mix of good fortune and good management.

The Fed and its wily chairman, Alan Greenspan, are getting much credit. The central bank allowed the expansion to continue uninterrupted as the unemployment rate slid toward 4 percent - a far lower rate than most economists, three years or so ago, thought possible without kicking off more inflation.

A Republican-led Congress and the Clinton administration should share in the praise. Despite their clashes, they did restrain federal spending. That, plus surging revenues from healthy growth in incomes and enormous capital gains in the stock market, turned huge deficits into budget surpluses. …

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