Host intro: 1996 saw the stock market move to new highs almost weekly. Will 1997 be as successful? Commentator Pete du Pont of the National Center for Policy Analysis tapped an expert's opinion to find out.
I talked recently with Louis Rukeyser of "Wall Street Week." In January 1996, he predicted that peace, low inflation and low interest rates would push the bull market even higher. I wondered what he thought about this year.
As an investor, Rukeyser said he's delighted with the market's performance. As a citizen, he's worried by our sluggish growth rate. We're stuck at 2 percent a year. It should be double that.
Problem number one: tax increases. Bush raised them. Clinton raised them. Growth stopped in its tracks.
Solution number one: cut taxes. It worked in the '60s and the '80s. Growth jumped.
Solution number two: cut spending. As Rukeyser says, whether they take it in directly in taxes or indirectly in inflation and debt, they still take it.
I wondered why markets seem to ignore the approaching Social Security and Medicare disasters. Echoing his own distinction, investor Rukeyser says if a problem isn't about to flatten it in the next 48 hours, the market doesn't know it's there. Citizen Rukeyser says the way to diffuse the time bomb is by partially privatizing Social Security — something he's promoted for 25 years.
Well those are my ideas — and Rukeyser's. And at the NCPA, we know ideas can change the world. I'm Pete du Pont, and I'll see you tomorrow.
Host outro: Tomorrow, Pete du Pont reveals Hollywood's top screenwriter of the last few years. You'll never guess who it is.