Originally created 07/10/02

Reasons to be optimistic about market



There are a number of valid reasons why the U.S. economy will probably demonstrate an upturn in the second half of this year and relegate to limbo the mild recession we are now undergoing.

First of all, there is nothing basically wrong with the economy. Americans are still taking home paychecks. What has happened to slow the economy are several factors which, when taken together, have reduced the gross domestic product (the total of goods and services produced within U.S. borders) by several points.

The government has slashed spending in several sectors in an attempt to keep the budget in relative balance and to fight inflation. Then, too, defense-related spending has come down as Afghanistan takes over the war in the aftermath of the Sept. 11 tragedy at home.

American and Allied troop strength has been cut. U.S. forces are being reduced overseas. This, too, has added to the available allied manpower pool returning to home soil.

The sale of new vehicles, a vital part of the U.S. economy, has shown a rise in the past year or so. This is somewhat cyclical and a spurt in American vehicle sales is now steadily rising.

Another solid part of the uptick of the domestic economy is construction. As a result, inflation is still turning down. And President George W. Bush can spend more of his time on homeland security.

Bob Gordy, Louisville, Ga.