Word: slump
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Dates: during 1980-1989
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...anti-action case: the aftershock of the stock-market quake might tip the U.S. into a recession next year. And that is the wrong time to slash away at the deficit; tax boosts and cuts in Government spending would deepen any slump, because they would reduce the amount of money in consumers' hands. Some worriers go so far as to raise the ghost of Herbert Hoover, who slashed federal spending and persuaded Congress to raise income tax rates sharply in the wake of the 1929 Crash. Says University of Tennessee Economist Paul Davidson: "Cutting the deficit at this particular time...
...different kind of stock-market beating. Only two days before Black Monday, the government had successfully completed the $2.6 billion sale of state-owned Compagnie Financiere de Suez, a financial combine. Last week Suez's debut on the battered Paris Bourse was suddenly postponed. Reason: in the continuing stock slump, shareholders would be hit by immediate losses. To cushion the blow, the 1.6 million small investors who bought Suez shares may eventually be allowed to pay in installments...
...major impact on local economies. With the monumental exception of Tokyo, now the world's largest stock market (with a value of almost $2.5 trillion, vs. the New York Stock Exchange's $2 trillion), most foreign markets are small * compared with those in the U.S. Before the October slump, shares on the London Stock Exchange were worth $824 billion, those in Paris $200 billion...
...substantially. Certainly these must include painful spending cuts. But ^ they must also include tax increases, much as Reagan hates the thought. Not because they are any panacea; indeed they carry a serious risk. Higher taxes might reduce consumer spending just when a recession is beginning, and deepen the slump. But no significant budget cut is possible without at least some sort of modest tax increase, and no progress toward solving the nation's fundamental economic problems is possible without a real deficit reduction...
...important stake in U.S. economic policy. The worldwide market crack is already hurting their economies; for example, it has delayed European programs to privatize industry by selling chunks of government-owned companies to individual investors. An American recession, should that be the result of a continued stock slump, could quickly travel abroad...