[net.misc] deficits and recession

dash@fluke.UUCP (Mike Dash) (01/30/84)

i've never understood why the federal deficit has anything to do with
the recession or inflation... until this short note in today's wall street
journal shed some light on the subject.  i pass it along for anyone else who
is curious about the connection:

	the figures involved are unprecedented: Mostly because the 
	government had to borrow to finance a $200 billion deficit, the
	pool of domestic funds available for new private investment shrank
	to 1.8% of gross national product last year.  That compares with
	about 7% of GNP that was available for new investment during the 
	1950's, 7.5% during the 1960's, and 6.3% during the 1970's.