Macroeconomics of a slowing economy (Part II)

Today was the last date for the 3rd estimated tax payment date (September 15th). As I paid my estimated taxes today, I couldn't help but think about another aspect of economic demand government consumption.

With the kind of fiscal indiscipline we have seen in the last six years (Both necessary and otherwise), I think we will see a controlled government expenditure during the next two years of Bush presidency. In a way last six years GDP has already borrowed some growth in the government expenditure from the next few years.

People might argue that what will stop Bush adminitration to keep spending through the next two years. I have two arguments in it's favor. First recent hires by Bush shows that next two years the monetary policy will be based on fiscal discipline. Also, Bush is not as strong in the Capitol as he was after September 11. So we will be seeing more democrats as well as republicans speaking out and at odd with Bush.

I will delay the post on investment strategies in a slowing economy. I think there is another important issue that needs to be addresses regarding the recent uptrend in the stock market.